The Prime Minister Narendra Modi in his address to nation on Tuesday announced a mega stimulus package of Rs.20 lakh crore, that comes to about 10% of the Nation’s GDP and which ranks amongst one of the biggest packages announced so far by the other prominent countries of the world.
Severe impact of Covid-19 is being felt on most of the economies of the world and India not being an exception, where the GDP is likely to be struck hard by this pandemic, so the stimulus package was an urgent requirement, so as to revive the hard hit economy of the country and this Mega package has been announced at the most appropriate time.
Middle Class Segment: What was most impressive in PM’s announcement was, he has said that such package would give a special focus on the middle class of the country. If we review the position, obviously the middle class segment has been the worst hit by this pandemic. Where on one side, the income of this segment which includes small traders, industrialists and other self employed professionals, was the worst hit, on the other side they are compulsorily and morally bound to bear the recurring expenses. So, for the survival of this segment this package was the utmost required. T
This package includes the earlier packages announced, which included the distribution of free food grains to poor and cash to poor women and elderly persons amounting to Rs 1.7 lakh crore in all and the RBI announcement of rate cut which amounts to about Rs.6.50 lakh crore. These two packages amounted to about 4% of the country’s GDP. Keeping in view the severe implications of Covid-19, said packages seemed to be quite small, however yesterday’s announcement seems to be a very good booster for the future economic growth of the country.
Coverage: On the whole as per the PM’s announcement the said package apart from the concentration on middle segment is likely to focus on land, labour, liquidity and laws. It will cater to various sections, including cottage industry, MSMEs, other industries and labour with a special focus on the Thelewalas and others doing manual labour.
However, the detailed announcements will be made by the Finance Minister in the coming days. The said announcements may include certain tax relief to small traders and MSMEs or subsidies to the industries making new investments or making capital investments.
Sanjeev Kumar Khanna (Financial Mentor)
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