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.
Frequently Asked Questions
A vaccine works by mimicking a natural infection. A vaccine not only induces immune response to protect people from any future COVID-19 infection, but also helps quickly build herd immunity to put an end to the pandemic. Herd immunity occurs when a sufficient percentage of a population becomes immune to a disease, making the spread of disease from person to person unlikely. The good news is that SARS-CoV-2 virus has been fairly stable, which increases the viability of a vaccine.
There are broadly four types of vaccine — one, a vaccine based on the whole virus (this could be either inactivated, or an attenuated [weakened] virus vaccine); two, a non-replicating viral vector vaccine that uses a benign virus as vector that carries the antigen of SARS-CoV; three, nucleic-acid vaccines that have genetic material like DNA and RNA of antigens like spike protein given to a person, helping human cells decode genetic material and produce the vaccine; and four, protein subunit vaccine wherein the recombinant proteins of SARS-COV-2 along with an adjuvant (booster) is given as a vaccine.
Vaccine development is a long, complex process. Unlike drugs that are given to people with a diseased, vaccines are given to healthy people and also vulnerable sections such as children, pregnant women and the elderly. So rigorous tests are compulsory. History says that the fastest time it took to develop a vaccine is five years, but it usually takes double or sometimes triple that time.
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.
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