The stimulus and beyond: Is a stronger demand support called for?

More demand-oriented measures may yet be introduced as we are still in the early stages of coping with the economic impact of Covid-19

Magnitude of stimulus: the sum and substance

The final picture of central government’s Covid-related stimulus package at the conclusion of the fifth tranche of finance minister’s announcement sums to Rs 20,97, 053 crore, which amounts to 9.8% of FY21 GDP. Only about 10% of this stimulus can be traced as direct additional budgetary cost to the central exchequer. Nearly 5% of the stimulus relates to already budgeted expenditures. The rest of the stimulus primarily pertains to RBI’s liquidity enhancement measures, government’s credit guarantee programs and insurance schemes. 

Migrant labour and MSME sector

The definition of an MSME entity has been