Government open to further stimulus to lift economy, says DEA Secretary

The government is preparing the third stimulus package to accelerate economic activities, a top official of the finance ministry said on Wednesday.

“The government has received suggestions from various ministries and industry sectors on needed measures," Economic Affairs Secretary Tarun Bajaj said at an event organised by industry body CII.

The stimulus will be sector specific, sources said. While announcing her second stimulus in the form of festive advance to government employees, Finance Minister Nirmala Sitharaman had hinted she was not averse to one more stimulus package once the economy starts picking up.

Industries have been demanding more sector specific stimulus to mitigate the impact of lockdown.

"What we need to do significantly is to ramp up demand stimulus. Factories are saying we have gone up to 60-70% production, credit lines are better, little bit of export orders are coming back into play but the consumer sentiment is weak. Without strong consumer sentiment, you will not have the economy coming back," Ficci President Sangita Reddy had recently said.

Bajaj also said that the government was pushing for more capital expenditure by various ministries and departments to create a multiplier effect in the economy.

“We will allocate more money for capital expenditure wherever necessary in our revised Budget estimates too," he said.

He said that months of January and February will give a clearer picture of economic revival. The pandemic saw certain sectors doing well. "Supply chains are impacted but the auto sector is seeing demand with the festive season. Minerals, drugs and Pharma sector have done well in the past few months. Exports are also up by almost 6%," the DEA secretary said.