India is preparing a stimulus package for sectors worst affected by a deadly coronavirus wave, aiming to support an economy struggling with localized lockdowns, The finance ministry is working on proposals to strengthen the tourism, aviation, and hospitality industries, along with small and medium-sized companies.
The latest wave of the Covid-19 pandemic has made India the global hotspot and has destroyed the tourism industry since the 2nd wave picked up. Though, Prime Minister Narendra Modi has refused to implement a strict nationwide lockdown. With high daily cases, many local governments including Maharashtra and Tamil Nadu have imposed lockdown against the spread of the virus.
That’s brought out many economists to cut their forecasts for the financial year that began on April 1, as rising unemployment and decreasing savings among consumers decrease the chances for double-digit growth. While the International Monetary Fund expects India’s economy to expand 12.5 per cent this year to March and will be revisiting the forecast in July the country’s central bank projects 10.5 per cent growth.
Flagging growth prospects put the responsibility on policymakers to support activity, especially once the virus caseload eases. Finance Minister Nirmala Sitharaman, who said last month she’s monitoring the economy in a “very detailed fashion,” has held discussions with economists in recent days about a stimulus package, a source said.