Fresh stimulus package on its way; likely to focus on middle class, SMEs
The government is gearing up to announce another stimulus package to bring the ailing economy back on track. The focus this time will be on the country's sprawling middle class population and small businesses.
Chief Economic Adviser Krishnamurthy V Subramanian said a few days ago that a second economic stimulus package can be expected very soon. His statement seems to resonate with the government’s plan to revive the ailing economy.
The government believes that rolling out the stimulus package now will reap higher benefits as the lockdown is over and most of the states have reopened businesses and most services.
It has come to light that the Finance Ministry has been holding key high-level meetings to determine the next course of action in reviving the economy.
Several meetings have been held during the past two months and criticism following the release of official GDP numbers has expedited the process.
India, which registered a GDP contraction of 23.9 per cent in the April-June quarter, has emerged as the worst-hit economy in the world.
It is believed that the Finance Ministry is aware of the challenges ahead as India is likely to witness a contraction in all the remaining quarters of 2020-21. The full year contraction could be in the range of 7 to 9.5 per cent, according to varied estimates given by experts.
The Prime Minister's Office(PMO) has also been kept in the the loop and in all the recent Finance Ministry meetings with the government’s Chief Economic Advisory Council, presentations have been made showcasing a future roadmap for economic revival.
With the festive season around the corner government is now hoping to boost demand — the key ingredient to strengthen India’s economy.
According to sources, government officials are holding regular meetings with corporate leaders on what is required for the next phase of economic recovery.
In their suggestions to the government, all businesses highlighted the slump in demand as the biggest challenge at the moment.