India issues big economic stimulus packages in Corona time |
India is likely to agree to an economic stimulus package of more than $19.6 billion to fight a downturn in the country that is currently locked down to stem the spread of coronavirus. The Indian government has not yet finalised the package and discussions are ongoing between Prime Minister Narendra Modi`s office, the finance ministry, and Reserve Bank of India. The stimulus plan could be as large as 30.5 billion dollars, but final numbers were still in discussion. The package, which could be announced by the end of the week, will be used to put money directly into the accounts of more than 100 million poor and to support businesses hit the hardest by the lockdown. The government will also increase its borrowing plan for the fiscal year 2020/21, which starts from the 1st of April, from the current planned gross borrowing of 7.8 trillion rupees. The government had asked the central bank to buy some of the government securities being issued, a move not undertaken by the Indian central bank in decades, due to fears of inflation spiking. The government could also use the central bank`s ways-and-means facility, an overdraft facility the RBI offers to the state, if it faces a cash crunch.
|
|
|
|