India announces Rs 20 lakh crore Covid relief package
The mega Rs 20 lakh crore stimulus package announced on Tuesday by Prime Minister Narendra Modi to bring economy on track, and focuses on tax breaks for small businesses as well as incentives for domestic manufacturing. The combined package works out to roughly 10 per cent of the GDP, making it among the most substantial in the world.
Finance Minister Nirmala Sitharaman made a slew of big ticket announcements on Wednesday, providing details of the monetary and fiscal support of Rs 20 lakh crore worth announced by Prime Minister Narendra Modi.
The Rs 20 lakh crore package includes Rs 1.7 lakh crore package of free foodgrains to poor and cash to poor women and elderly, announced in March, as well as the Reserve Bank's liquidity measures and interest rate cuts. While the March stimulus was 0.8 per cent of GDP, RBI's cut in interest rates and liquidity boosting measures totaled to 3.2 per cent of the GDP (about Rs 6.5 lakh crore).
"A special economic package is being announced to make India self-reliant," PM Modi said in his third address to the nation over COVID-19 pandemic. "This package, taken together with earlier announcements by the government during COVID crisis and decisions taken by RBI, is to the tune of Rs 20 lakh crore, which is equivalent to almost 10 per cent of India's GDP."
The package, he said, will focus on land, labour, liquidity and laws. It will cater to various sections, including cottage industry, MSMEs, labourers, middle class, and industries.