Stimulus package for worst affected sectors during second wave of Corona

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With the aim to support the economy that has been affected by localized lockdown, Government is preparing a stimulus package.

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The finance ministry is working on proposals to increase the tourism, aviation and hospitality industries, along with small and medium-sized companies.

India has become a global hotspot for the pandemic in the second wave of COVID-19 and has pulled down travel since the second wave picked up in March. With increasing daily cases, many local governments including Maharashtra and Tamil Nadu, India’s most industrialized states have imposed curbs against the spread of the virus.

That’s evoked many economists to cut their forecasts for the financial year that began April 1, as rising unemployment and shrinking savings among consumers faint the chances for double-digit growth. While the International Monetary Fund expects India’s economy to expand 12.5% this year to March and will be reconsider the forecast in July. RBI, the country’s central bank projects 10.5% growth.

In April, the finance ministry relieved the rules for capital expenditure by government departments to try to boost spending in the economy.

RBI is also facing pressure which serves as the banking sector regulator to ease loan repayment rules, especially for those sectors that are badly hit by this virus wave.