The government may announce by early next week the second relief package to tackle the economic fallout of the coronavirus outbreak, an official said of the decision that could coincide with the end of the lockdown on May 3.
"It should be announced by early next week. The final contours are still being fixed but should happen soon," a government official said, requesting anonymity.
The outbreak and the lockdown, which is in its sixth week, have hit all sectors of the economy. Restrictions are likely to be eased from May 4 in places with no infections or fewer cases but coronavirus hotspots are unlikely to get relief.
"The focus of the government right now is to reach out help for survival," the official said. "Sector-specific help will happen eventually. The focus right now is to reach out healthcare and subsistence to those in dire need."
The International Monetary Fund (IMF) on April 14 slashed India’s forecast, projecting a GDP growth of 1.9 percent in 2020. This comes at a time when the global economy is staring at its worst recession, with the virus bringing economic activity due to a grinding halt.
On April 27, India Ratings and Research (Ind-Ra) revised its FY21 growth forecast for the country down to 1.9 percent, lowest in the 29 years, from 3.6 percent. According to Ind-Ra, the Indian economy registered a growth of 1.1 percent in the financial year 1991-92.
Ind-Ra said its growth projection was based on the assumption that a partial lockdown would continue till mid-May.
"GDP may come back to the fourth quarter of 2019-20 fiscal level only by the third quarter (October-December) of current 2020-21 fiscal, anticipating resumption of normal economic activities during the second quarter (July-September) of 2020-21 and festive demand during the third quarter of current fiscal (October-December)," it said.
The rating agency said on the fiscal front, the dip in tax/non-tax revenue due to the lockdown, growth slowdown coupled with the need to provide fiscal stimulus will destabilise the fiscal arithmetic of both union and state governments.