PM reviews coronavirus impact on economy; govt considers another stimulus

Prime Minister Narendra Modi on Thursday reviewed the impact of coronavirus on the Indian economy and discussed a possible second stimulus to boost sectors hit hard by the pandemic. Modi held discussions with Finance Minister Nirmala Sitharaman on the ongoing situation.

The meeting comes amid a drastic reduction in GDP growth forecast by various multilateral funding agencies for the current fiscal due to the impact of coronavirus and consequent lockdown. State of the economy was discussed in detail during the meeting, sources said, adding resource mobilisation for taking on the future challenges was also highlighted.

The prime minister had on April 14 extended the nationwide lockdown till May 3 to check the rapid spread of the respiratory illness. The lockdown, which was first announced in the last week of March, triggered massive migration as industries shut shop. 

As per the World Bank's latest assessment, India is expected to grow 1.5 per cent to 2.8 per cent. Similarly, the IMF on Tuesday projected a GDP growth of 1.9 per cent for India in 2020, as the global economy hits the worst recession since the Great Depression in the 1930s.

The pandemic and consequent lockdown have hit various sectors, including MSME, hospitality, civil aviation, agriculture, and allied sector. The government constituted an empowered group - headed by Economic Affairs Secretary Atanu Chakraborty - which is entrusted with the task of suggesting measures that can bring the economy back on track quickly post the lockdown.

Finance Minister Nirmala Sitharaman returns to work, reach Finance Ministry at North Block in New Delhi. Photo: Dalip Kumar

Besides, it was also asked to work on relief and welfare measures for various sectors of the economy as well as for the poor and needy. In his address to the nation, the Prime Minister had expressed concern over problems being faced by poor and daily wagers and farmers. "The government has made every possible effort to help them through Pradhan Mantri Gareeb Kalyan Yojana. Their interests have also been taken care of while making the new guidelines," he had said.

To ease the pain and misery, the Finance Minister last month announced a Rs 1.7 trillion stimulus that included free foodgrains and cooking gas to poor for three months, and cash doles to women and poor senior citizens as it looked to ease the economic impact of the nationwide lockdown.

As per the announcement, 80 crore poor ration cardholders will each get 5 kg of wheat or rice and one kg of preferred pulses free of cost every month for the next three months, while, 20.4 crore women having Jan Dhan bank accounts would get cash help of Rs 1,500 spread over three months. Over 8.3 crore poor women, who were handed out free cooking gas connections since 2016, will get free LPG refills for the next three months, while poor senior citizens, widows and disabled will get ex-gratia cash of Rs 1,000.

Sitharaman had hinted at more announcements if the need arises.

In a bid to save resources, the government has already put restrictions on expenditure and funds are being diverted towards the fight against the virus. Besides, the Union Cabinet approved a 30 per cent reduction in salary and allowances of Members of Parliament for one year.

President, Vice President, and Governors voluntarily decided to take a pay cut as a gesture towards concerted effort to contain the spread of the deadly virus. At the same time, the government has decided to suspend MPLADS and funds would be directed towards improving medical infrastructure.