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Coronavirus: What's holding up new stimulus package? 4 reasons
Vadodara News Network May 09, 2020
Weeks have passed since the government announced a Rs 1.7 lakh crore package to ease the economic pain caused by the coronavirus crisis. A second package hasn’t been announced yet. What’s holding it up? Read on.
Govt consulting experts on financial package
Adopts wait-and-watch policy as cases rise
Deciding between smaller packages or big amount
In the weeks since the government announced a Rs 1.7 lakh crore package to help economically weaker sections, finance ministry corridors are buzzing about another one to help industries.
But in spite of numerous discussions with industry bodies and leaders and experts from various sectors — as well as inter-departmental meetings within the finance ministry — a package hasn’t been announced yet. Many are beginning to wonder if it ever will.
Sectors like aviation, hospitality and MSMEs have already sent the government proposals, on which it is still deliberating.
What’s holding up the stimulus package?
Prime Minister Narendra Modi is skeptical of handing out large packages (to industries) that might not get used properly. History offers proof that help provided by the government doesn’t always translate on the ground. PM Modi doesn’t want that to happen, especially since the country is battling the coronavirus. The government wants to make sure the package is airtight, with no scope for any misuse.
The government is taking suggestions from economists and experts who’ve worked with it earlier; it has consulted former deputy governors of the RBI on the package, sources told India Today TV. This is being done to get a 360-degree perspective on India’s’s economic situation — not just from those currently in government, but also from those who’re no longer part of the establishment. Some experts have suggested changes in the government’s package and this is being worked out now, sources said.
The government is adopting a wait-and-watch policy as the number of India’s coronavirus cases is increasing. Some in the administration believe that announcing the package will be more useful once industries restart operations. With some already opening up, the buzz within industry circles is that the government will make the package announcement once more resume work.
With many sectors looking to it for help, the government is deciding whether to give smaller packages to industries that need them the most, or to announce a big amount like it did last time, and then let industries take their pick depending on requirements.
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