The Centre is preparing a stimulus package for the sectors severely affected by the second wave of coronavirus pandemic, news agency Bloomberg reported on Tuesday. Finance ministry is working on proposals to bolster tourism, aviation and hospitality industries, along with small-to-medium enterprises, the news agency said. The discussions are at an early stage and no timeline for an announcement has been decided, the report added.
The second wave of coronavirus pandemic has severely hit the country. With several states announcing local lockdowns to prevent the virus spread, the recovery process from the devastating impact of first wave of COVID-19 has become difficult for many — especially for the tourism, hospitality sector and MSMEs.
Earlier this month, industry chamber PHDCCI urged the government to announce a “substantial" stimulus package to support economic growth battered by the second wave of COVID-19. It has submitted 17 recommendations to finance minister Nirmala Sitharaman on financial and structural support to micro, small and medium enterprises (MSMEs) such as extending the moratorium period and offering concessional rates of interest on borrowings.
It has asked for unhindered operations of all business and industrial operations across the value chain as any disruption could cause severe economic hardships including reverse migration of labour.
“The second wave of pandemic COVID-19 is spreading faster than the first wave and affecting almost every household in India. The industry body has recommended a substantial stimulus package to support the economy, trade, and industry in this extremely difficult time," the chamber said in a statement.
Considering the situation in the country, several economists to cut their forecasts. The Reserve Bank of India had projected 10.5% GDP growth in 2021-22 while keeping an accommodative stance. The International Monetary Fund expects India’s economy to expand 12.5% this year to March and will be revisiting the forecast in July.
In 2020, the Centre announced a host of economic stimulus packages to restart the economy after months of strict nationwide lockdown. In April, the finance ministry eased rules for capital expenditure by government departments to try to boost spending in the economy. The central government also announced steps to ease imports of oxygen and medical equipment.