Finance Minister Nirmala Sitharaman may announce a massive economic stimulus package worth Rs 3 lakh crore later this week, according to a report in the Business Standard.
Other ministries are also expected to offer revival packages for their respective sectors.
The spending on all the initiatives put together is expected to rival that offered by G-20 nations in terms of percentage of GDP.
Moneycontrol could not independently verify the report.
The government was earlier considering a measured approach to deal with the situation despite mounting pressure from industries.
Government officials pointed out that one of the reasons for the change in stance could be the wiggle room provided by the increase in proposed borrowing for FY21 to Rs 12 lakh crore from Rs 7.8 lakh crore.
Another reason might be the increasing uncertainty on how “deep the economic slump is and could be”. The government may also want to support small businesses as the economy gradually opens up.
The official added that the “next set of announcements” would be massive compared to the previous Rs 1.7 lakh crore package announced by the Finance Minister.
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What is expected?
> Credit guarantee scheme for working capital loans of micro, small and medium enterprises
> Incentives for companies and businesses to maintain a stable workforce, especially as the migrant workers' crisis deepens
> Expansion of direct benefit transfer (DBT) schemes
> Possible hike in MNREGA payments
> Accelerated disbursals under PM-KISAN Scheme
> Expanded economic activity in Green and Orange Zones, and further gradual easing of lockdown
> Details on the resumption of train services, possible resumption of flight services
> Boost for sectors worst hit by the pandemic such as hospitality, tourism, travel, aviation, and auto among others
> Separate announcements by various ministries for their particular sector (s) – such as non-banking finance companies (NBFCs) and mutual funds (MFs).
Industries bodies have been continually asking the government for financial support. On May 11, FICCI President Sangita Reddy in a letter to the Finance Minister said: “quick release” of Rs 2.5 lakh crore is essential for the Indian economy.
The industry body had suggested a Rs 4.5 lakh crore support package on the whole.
Reddy also made a case for the need to create a self-sufficiency fund for innovation, construction and manufacturing clusters to make use of the emerging opportunities in the wake of disruption in the global supply chain.Follow our full COVID-19 coverage here