FM Nirmala Sitharaman’s statement came at a time when chorus for another stimulus package has grown amid massive stress on the economy due to curbs linked to COVID-19 second wave
Union Finance Minister Nirmala Sitharaman (File image)
Union Finance Minister Nirmala Sitharaman said on May 28 that the Centre was in talks with states to assess impact of lockdown-like measures on various sectors and a final call on the next stimulus package had not been taken.
“The [Union] Budget has been announced only on February 1, we are in May, we have the entire year to go, the second wave has come and while there’s not a complete lockdown, states have had a lockdown. So we are getting inputs, we need to take a call. We need to understand where the impact is, how much it is and so on. That process of consulting, the states consulting, industry, is going on. We have not made any final call,” FM Sitharaman said during a press briefing after the GST Council meeting.
FM Sitharaman’s statement came at a time when chorus for another stimulus package has grown amid massive stress in the economy that has been battered by the second wave of COVID-19 cases and lockdown-like restrictions imposed by many states to curb the further spread of infections.
While India’s daily COVID-19 cases have dropped over the last two weeks, the infection rate remains high. Thus, states are hesitating to begin the reopening process.
Earlier, news reports had suggested that the finance ministry may announce another stimulus package – similar to the one released in 2020 – after the nationwide ‘unlocking’ process begins.
A recent poll by Reuters found that India’s economic outlook has weakened again, stoking fears the job crisis may worsen over the coming year.
Renewed restrictions have stalled economic activity, leaving many millions out of work and pushing economists – who had broadly been bullish – to downgrade their views for the second time since early April.
The May 20-27 poll showed the outlook for the current quarter was lowered to 21.6 percent annually, and to 9.8 percent on average for this fiscal year, down from 23.0 percent and 10.4 percent respectively a month ago. The economy was then forecast to grow 6.7 percent next fiscal year, compared to 6.5 percent predicted previously.
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