India planning fresh $20 billion stimulus

Agencies | New Delhi

The Daily Tribune – www.newsofbahrain.com

India is planning to announce a fresh round of stimulus totalling about $20 billion this week to help pull the economy out of its historic contraction, government officials said on Wednesday.

The package would follow Wednesday's earlier announcement of production-linked incentives worth about $27 billion over five years for manufacturers in 10 sectors.

Prime Minister Narendra Modi, finance minister Nirmala Sitharaman and other top officials will finalise the plan on Thursday, said the sources, who asked not to be named.

The sources did not provide details of the package besides saying that it would be targeted towards stressed sectors with a focus on generating employment.

Indian government's last stimulus package in May largely failed to soften blow of the strict coronavirus lockdown as it focused on providing liquidity and collateral-free credit for small businesses but with little actual spending.

That package also left out badly hit sectors such as tourism, hospitality and aviation.

The Indian economy, which the International Monetary Fund singled out as a global bright spot only a few years ago, contracted a hefty 23.9 per cent in the April-June quarter and is seen contracting over 10 per cent in the fiscal year to March 2021.

Coronavirus cases are still surging in major Indian cities and the country has been adding over 40,000 cases a day.

Active coronavirus cases have nevertheless fallen below 500,000 for the first time in over three months although the government has eased nearly all restrictions to curb the virus' spread.