Finance Minister Nirmala Sitharaman on Saturday said the Finance Ministry compared every announcement made by different countries before India to see what their stimulus package consisted of.
"All that (different stimulus packages) has been studied. Every country has brought in basket of measures-- fiscal, monetary, guarantee, central liquidty and so on," said Sitharaman while delving into the rationale of the break up of the ₹20 lakh crore package announced last week in the wake of pandemic.
"To think that all other countries have come up with only outgo from budget and not as though they've underplayed everything else they've done. On the contrary they have also gone into liquidity being infused both through central bank and through their own guarantee and other things," Sitharaman said.
She further said that India's package is "not at all different from them" and that only "the proportion might vary".
"When developed countries have certain institutions it is possible for them to go through one route and play less on the other route," said Sitharaman.
"India has great advantage in terms of technology, transfer of cash and other things are possible. That's how through PM Garib Kalyan we could infuse cash into hands of people through their Jan Dhan accounts. We've come with measures which will get more liquidity into economy," the minister further said.
The government had last week defended its decision to include ₹6.5 lakh crore liquidity measures in its Covid-19 stimulus package, saying most countries have combined fiscal and monetary initiatives to deal with the crisis.
Many analysts and political leaders have expressed dismay over inclusion of monetary interventions in the stimulus package.
Explaining this, Expenditure Secretary T V Somanathan said unfortunately the argument is not correct and the fact is that packages announced by most countries are a combination of actual fiscal outgo and liquidity provisions.
For example, he said, "One country that gave out what is called a 15 per cent (of GDP) package which a lot of people talk about. Please look at it, 14.9 per cent of it was liquidity. So, it is not as if only one part of a package is counted."
There is a mix of fiscal measures and liquidity provision, and almost every country in the world counts it this way, he said.