India is making plans to introduce a stimulus package to support sectors hit by its worst coronavirus wave, according to Bloomberg. The package’s aim is to boost the economy as it struggles as a result of lockdowns.
A ministry of finance spokesperson confirmed that India is working on proposals to support tourism, aviation, hospitality industries, as well as small and medium-sized firms.
Local governments have imposed curbs to tame the spread of the virus with many economists cutting financial projections for the year that began on April 1st.
Indian’s coronavirus wave has led to increasing cases of unemployment and declining savings among consumers threatening hopes for double-digit growth.
Nirmal Bang Equities economist Teresa John hinted that Modi’s administration lacks adequate room to maneuver despite receipt of about $14 billion from the country’s Reserve Bank.
With limited options, India’s government is expected to rely on additional guarantees and tax reliefs for demand boosting measures as they anticipate reopening.
India’s finance ministry in April tried to boost the economy by easing rules for government’s capital expenditure.
India plans to lower its budget to 6.8% of GDP for the financial year ending March 2022 down from previously projected 9.5% as the economy battles the coronavirus.
