Prime Minister Narendra Modi's Rs 20 lakh crore relief package, termed as to bring life into the Indian economy battered by coronavirus pandemic lockdown is one of the largest among world economies, numbers show. Announcing India's relief stimulus, which also includes measures taken by the Reserve Bank of India, PM Modi promised big-ticket reforms in different sectors. The details of the relief package will be announced by Finance Minister Nirmala Sitharaman.
PM Modi in his Tuesday's address to the nation, termed the economic relief package equivalent to 10 per cent of India's total GDP.
Indiatvnews.com explains why the relief package announced by the prime minister is among the world's largest.
Key Elements of Relief Package
The Rs 20 lakh crore relief package announced by Prime Minister Narendra Modi addresses four key components:
Cash Support Announced So Far
A total stimulus of Rs 20 lakh crore has been announced by the prime minister, which makes up 10 per cent of the country's GDP. The Rs 20 lakh crore package includes Rs 1.7 lakh crore package of free foodgrains to poor and cash to poor women and elderly, which was already announced by Finance Minister Nirmala Sitharaman, along with the Reserve Bank's liquidity measures and interest rate cuts. While the March stimulus was 0.8 per cent of GDP, RBI's cut in interest rates and liquidity boosting measures totalled to 3.2 per cent of the GDP (about Rs 6.5 lakh crore).
Areas Targeted by Economic Relief Package
- Cottage Industries
- Labourers and farmers
- Middle Class
What economic relief package may include
- Loan guarantee for MSMEs
- Wage support for workers
- Financial support for migrant workers
- Tax incentives to make production competitive at the local level (FM indicated it in her tweet)
- Announcement for the tax-paying middle class
- Support for construction and housing sector
- Support for hawkers and vendors
- Relief for the aviation sector that is the worst-hit under coronavirus pandemic
Apart from this, India's economic package is also likely to cover different factors of production such as Land and Labour, and simplify laws, the EconomicTimes reported.
There are other key measures of this stimulus package and industry hopes that the government will take note of the supply chains related to farming, rational tax system and on human resources considering how eagerly the manufacturing sector is waiting for a restart.
Industry welcomed PM Modi's big-stimulus package announcement.
Reactions after PM Modi's Aatm Nirbhar Bharat Abhiyan announcement
Gautam Adani on Twitter: "The #AatmanirbharBharat package is not just historic for its scale but for its diverse vision focussing on land, labour, liquidity, & laws, a canvas covering wide sections of people. This could be a defining moment in PM @narendramodi & his govt's vision to transform India."
Anand Mahindra: This was the PM’s Carpe Diem (Seize the Day) speech; an opportunity to change the narrative from ‘Survival’ to ‘Strength.’ We will know tomorrow whether or not this is going to be a transformational moment like 1991. What I also believe is I won’t get much sleep tonight!