Finance Minister Nirmala Sitharaman is expected to announce an economic stimulus package worth Rs 3 lakh crore later this week, according to a news report.
The quantum of her next set of announcements could total three trillion rupees or more, Business Standard reported on Tuesday. The spending on all the initiatives put together is expected to be similar to what is offered by G-20 countries in terms of the GDP percentage.
The central government has been considering a measured approach to deal with the lockdown situation to curb the spread of Covid-19 amid growing pressure from the industries. It recently announced its plans to borrow 54 per cent or a little over Rs 4 lakh crore more than budgeted estimates of Rs 7.8 lakh crore.
According to a government official, the “next set of announcements” would be massive compared to the Rs 1.7 lakh crore package announced earlier by the Finance Minister.
The Confederation of Indian Industry (CII) in a report filed in April said that India's GDP is likely to range between a decline of 0.9 per cent and a growth of 1.5 per cent in the current financial year, with the economy undergoing a "turbulent" phase caused by the coronavirus-induced lockdown
In the baseline scenario, the Gross Domestic Product (GDP) is expected to grow at just 0.6 per cent on an annual basis as economic activity is expected to remain constrained due to continuing restrictions on the free movement of goods and people beyond the lockdown period.
This will lead to disruption in supply chains, slow pick-up in investment activity, labour shortages in the short-run and muted consumption demand on account of reduced household incomes, the industry body said.
In the optimistic scenario, which envisages a faster pick-up post the lockdown period, the GDP is forecast to register a growth of 1.5 per cent in the best case.
In case of a more prolonged outbreak, where the restrictions in existing hot-spot regions get extended, while new regions are identified as 'hot-spots' leading to intermittent stop and start in economic activity, GDP is likely to decline by -0.9 per cent.