PM Modi announces ₹20 trillion stimulus package to restart economy2 min read . Updated: 12 May 2020, 08:57 PM IST
- The economic relief package that comprises of around 10% of India’s GDP will focus on land, labour, liquidity and laws and includes the monetary easing announced by RBI
- This comes in the backdrop of the growing demand by the states of a fiscal stimulus package from the Centre
New Delhi: Prime Minister Narendra Modi on Tuesday announced the long-awaited stimulus package of Rs20 trillion for businesses and workers to soften the devastating blow from the coronavirus lockdown that has pushed many companies to the brink of bankruptcy with revenues and cash flows disappearing overnight.
The New Deal for Aatmanirbhar Bharat - a resilient India, comprises of around 10% of India’s grade domestic product (GDP) and will focus on land, labour, liquidity and laws. It accounts for almost a full year of India’s gross tax revenue and includes the monetary easing announced by the Reserve Bank of India.
Articulating the plans, PM Modi said that the self-reliant strategy will depend on five pillars—-.growing a new economy, creating a state-of-the-art infrastructure, setting up a technology-based delivery system, leveraging the young demography and by exploiting domestic demand.
“We will make the best products, improve our quality and better our supply chain," Modi said.
This comes in the backdrop of the growing demand by the states of a fiscal stimulus package from the Centre and more financing options to tide over the financial crunch while they fight the covid-19 outbreak. The states had have been seeking support to MSMEs, infrastructure projects such as power, easing of interest rates on loans and assured market access to the agricultural produce.
“We have to protect ourselves and also go ahead," Modi said and added, “We have been hearing for a long time that the 21st century is India’s century. This is not only our dream but also our responsibility. We are constantly monitoring the global situation."
The announcement comes as India further opens up its economy with riders in the fourth phase of the national lockdown starting on 18 May, with fewer restrictions.
The new package is not aimed through a trickle down approach but looks to empowers everyone with a focus on labour, hawkers, street vendors among others who tend to get neglected.
Drawing from his personal experience of disaster management, recovery and rehabilitation post the Kutch earthquake in 2001, Modi said that if the Kutch story is a reflection of performance in adversity, then India story will truly make a grand story.
“The crisis has brought a message to India, it has brought an opportunity," Modi said and added, “When the crisis started, India didn’t manufacture even one PPE kit. There was hardly any manufacturing of N95 masks. Today two lakh each of these are being manufactured daily in the country."
While giving a clarion call to create a self-reliant India; Modi explained that this call for self-reliance is very different from the isolationist and protectionist self-reliance movements across the worlds. Modi stated that self-reliance for India is neither exclusionary nor isolationist.
Pay cuts and retrenchment have become a norm across sectors as cash flows have dried up. Reopening the economy and focusing the restrictions on tightly defined coronavirus hotspots have become crucial as the economic cost of the lockdown has become enormous with loss of livelihoods, fears of corporate bankruptcies and an overall contraction in the economy this fiscal.
After his fifth meeting with the state chief ministers on Monday about combating the pandemic, Modi said the suggestions made by the states for an economic roadmap has been given due consideration.
Modi has earlier said that India must leverage the opportunities that arise in the Post COVID era and “we must all plan for the new world reality."