Second Covid stimulus on way, PM reviews impact

Tribune News Service

New Delhi, April 16

The government is preparing a second Covid stimulus package in time for partial reopening of some industries from Monday. The issue of mobilising resources and the framework of the package were discussed at a meeting here today between Prime Minister Narendra Modi and Union Finance Minister Nirmala Sitharaman, said sources.

This will be the second Covid relief package. It is expected to focus on small and medium industry that have been hit in quick succession by demonetisation, GST and now the pandemic. The IMF and the World Bank have both pegged India’s GDP growth at rock bottom levels during the current fiscal which translates into a recession.

The government had earlier announced and largely disbursed a Rs 1.7 lakh crore relief package for the economically challenged that includes direct cash transfers to the poor and free ration. It has also been announcing relaxations in mandatory compliances for businesses and individuals.

Sources said the PM and FM discussed the vital issue of resource mobilisation against the backdrop of revenue projection figures, including GST and direct tax collections, having gone haywire due to slow growth followed by Covid-induced lockdown.

According to indications, the stimulus will follow the course of government’s pre-Covid effort to revive growth by announcing initiatives in stages. Besides the micro, small and medium enterprise (MSMEs) segments, the country’s largest employment generator and which has been worst hit by the lockdown, the government may look at cash transfers for some service sectors, especially hospitality and tourism. Besides, the equally badly hit aviation, exports, textiles and gems and jewellery may also get special consideration.

The stimulus is being timed with the phased opening in certain sectors from Monday and will seek to address issues like hiking bank credit to provide wages, deferral of tax dues, suspending the bankruptcy code and cash transfers.

The North Block has extensively interacted with various ministries and departments besides sectoral industry associations. The government has already set up an empowered group headed by Economic Affairs Secretary Atanu Chakraborty to suggest revival measures.

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IMF: Asia growth to stall at 0%

Washington, April 16

Top official of the International Monetary Fund (IMF) Chang Yong Rhee, Director, Asia and Pacific Department, has said the impact of coronavirus on Asia will be severe across the board and unprecedented.

“We expect growth in Asia to stall at zero per cent in 2020. This is a remarkable downgrade since Asia has not experienced zero growth in the last 60 years” he said. This is lower than the annual average growth rates throughout the global financial crisis (4.7%) or the Asian financial crisis (1.3%). “But since Asia was exposed to the virus before other countries, a recovery may begin earlier, and growth in 2021 is expected to rise to 7.6 per cent,” Rhee said. PTI