₹20L-Cr boost for self-reliant India

BATTLING COVID PM says fiscal stimulus will amount to around 10% of GDP; Union cabinet likely to approve contours of package today, details expected soon

NEW DELHI: Prime Minister Narendra Modi announced a ~20 lakh crore economic package to help individuals and businesses deal with the Covid-19 pandemic and the lockdown enforced to combat its spread, and to, as he put it, turn the “crisis into an opportunity”.

Details of the package, which is the equivalent of a little below 10% of the GDP, will be announced over the next few days, starting Wednesday, by finance minister Nirmala Sitharaman.

The Prime Minister said the package – Atmanirbhar Bharat Abhiyan (Self-reliant India Mission) -- would cover “land, labour, liquidity, and laws”, industry and businesses of all sizes, and farmers, entrepreneurs, and the middle class. And he repeatedly stressed on the theme of self-reliance and the importance of keeping manufacturing, markets and supply chains local.

“When India speaks of self-reliance, it does not advocate a selfcentered system. In India’s selfreliance there is a concern for the whole world’s happiness, cooperation and peace,” Modi said, adding that local suppliers have met India’s demands in this hour of crisis, and now “Indians have to be ‘vocal about local’ and buy products from them”.

The amount includes the ~1.7 lakh crore already announced —

a cash transfer and food package aimed at the most vulnerable — and the measures announced by the Reserve Bank of India (RBI). The central bank has announced liquidity infusion and targeted credit measures aggregating anything between ~4.5 lakh crore. That means the package to be announced over the next few days will total around ~14 lakh crore.

While the specifics of the package will emerge over the next few days, a spate of reports over the past few weeks have indicated the kind of initiatives that may be launched: a large fund for micro, small, and medium enterprises (MSMEs); a well-capitalised bad bank; a loan guarantee scheme for businesses; incentives for local manufacturing; and direct cash

transfers to the poor.

The ~20 lakh crore package meets the demand of industry bodies — the Confederation of Indian Industry (CII) asked for an “immediate stimulus package” of ~15 lakh crore on May 9; the Federation of Indian Chambers of Commerce and Industry (Ficci) asked for ~10 lakh crore; and the PHD Chamber of Commerce ~16 lakh crore.