Govt's stimulus package has preserved macro stability: KKR India head

The stimulus package announced by the government following the Covid-19 outbreak has been able to preserve macroeconomic stability and it has not come at a huge cost, KKR India Partner and CEO Sanjay Nayar said on Friday.

Speaking at the India Global Week 2020, Nayar expressed hope that large private sector players would contribute to economic recovery along with the government.

"...there are some groups which are rapidly deleveraging, re-investing. I think it's going to take both the hands to clap. You need the government to spend more, which they are doing through the infrastructure spend, and you also need large private sector to spend," the India head of the global investment firm said.

The private sector has been shying away from making investments in the economy for the past four-five years, he said.

"While entrepreneurial spirit is intact and we see a lot of smaller business people capitalise on it, large private sector has to contribute as well," he added.

There has been improvement in ease of doing business and further steps in this direction will attract more private capital, he noted. He further said India has achieved macroeconomic stability not at the cost of a huge stimulus but a very well targeted stimulus.

The government had announced a Rs 20.97 trillion stimulus package in May in five tranches to revive the economy hit hard by the Covid-19 pandemic.

The first tranche provided credit to small businesses and support to shadow banks and electricity distribution companies.

The second tranche included free foodgrain to stranded migrant workers and credit to farmers, totalling Rs 3.10 trillion. Spending on agri infrastructure and other measures for agriculture and allied sectors in the third tranche totalled to Rs 1.5 trillion.

The fourth and fifth tranches dealt mostly with structural reforms, including relaxation of foreign direct investment (FDI) limit in defence, privatisation of six more airports, and fully opening up coal mining to the private sector.