The Modi government has provided a package of 20.97 lakh crore rupees to bring the country’s economy completely back on track due to the Covid-19 epidemic. Finance Minister Nirmala Sitharaman has also given a breakup of this package. However, the rating agency Fitch has estimated that this package is not able to rescue the country from the crisis.
Only 1% of GDP package: Fitch
Fitch also told that the self-sufficient India package constitutes only one percent of the country’s gross domestic product (GDP). Let us know that Prime Minister Narendra Modi announced a package of 20 lakh crore rupees on 12 May to deal with Coronavirus. At the same time, the government claims that it is 10 percent of the country’s GDP.
Finance Minister breaks up the package in 5 times
UK agency Fitch Solutions said, “Nearly half of the corona relief package is linked to the fiscal measures. It had already been announced. It also added that the Reserve Bank of India’s monetary stimulus announcements were also connected to this.” Explain that Finance Minister Nirmala Sitharaman gave a breakup of 5 million rupees package through 5 press conference.
Economy crisis growing due to lockdown
According to the rating agency, India’s economic growth rate is estimated to be 1.8 percent in the year 2020-21. As stated by Fitch, the lockdown imposed to prevent the infection of coronavirus is resulting in an increase in the crisis of India’s economy. Also, both domestic and global demand is weakening. As predicted by the agency, the delay in the government’s relief package will increase the risk of the economy falling.
Besides the agency suggested that the government needs to spend more money to get India’s economy out of the Coronavirus crisis, but it could increase the fiscal deficit. With reference to the report, in the announcements made between May 13 and 17, the Modi government has made regulatory reforms along with loan guarantee, extension in the repayment period, etc.