New Delhi: Rescue packages announced by governments across the world to counter the economic downturn has crossed $10 trillion (about Rs50,00,000 crore) — an amount equivalent to nearly 10 times the size of the Indian economy.
The amount is believed to growing even bigger as there is no end in sight for the turmoil.
However, the multi-billion dollar stimulus package announced by India is much small — still in single digit — as the impact of the crisis is not considered as great as in other countries.
The much-awaited package, announced on Sunday, included an additional spending of Rs 20000 crore ($4 billion) and duty cuts worth Rs8,700 crore ($1.7 billion). Some additional funding and guarantee provisions take the total package to a little over Rs30,000 crore (about $6 billion).
The package has been cobbled together with some public expenditure, channelising of bank spending and reduction in excise duty.
A lion’s share of about three-fourth of the worldwide bailout package of about $10.1 trillion has come from the world’s biggest economy, the US, whose total national debt has also incidentally crossed the $10 trillion mark.
The size of the entire Indian economy, where the impact of global crisis has been relatively less disastrous, pales at about $1 trillion.
These bailouts, in both developed and developing world have turned severe after the fall of Lehman Brothers, coming in various forms of financial stimulus by the governments across the world — be it ploughing in fresh money into a crisis-ridden institution, bringing them under the government’s fold or other fiscal measures.
America set the ball rolling for such packages, with the world’s largest economy announcing $700 billion plan to shore up the fortunes of the battered financial institutions. Taking into account other rescue acts by the US, its total bailout plan runs into more than $7 trillion.
Various European nations together have come up with about $1.3 trillion in financial assistance apart from the European Commission urging the constituent countries to pledge nearly $254 billion.
Further, Germany has thrown lifelines to the tune of $60 billion to save the country’s leading financial firms — Dexia Bank and Hypo Real Estate — both of which were battered by the worsening economic turmoil.
While Hypo Real Estate received $50 billion, Dexia Bank got a lifeline worth about $10 billion.
Among the developing nations, China has announced a massive $586 billion plan to boost its economy and the funds would be mainly utilised for infrastructure projects.
Other major bailouts in recent times include $572 billion pumped by Ireland administration to strengthen the country’s banks, $150 billion pledged by Russia and $30 billion put in by the Poland government.
Meanwhile, the whopping $7 trillion injected into the economy by the US, includes billions of dollars of term funding facilities, currency swap arrangement with various foreign governments and rescue of Wall Street giants.
The Bush administration recently came up with another mega $800 billion plan, which would help in buying toxic mortgage assets, among others.
Further, US threw a lifeline of over $300 billion to banking behemoth Citigroup.
In the United Kingdom, the administration has announced injection of more than $100 billion, with funds primarily utilised to rescue its banks.