Coronavirus lockdown: Now, all eyes on fiscal package

After the Reserve Bank of India delivered its second tranche of stimulus mainly prodding banks to lend more to non-banking and housing finance companies struggling to stay afloat in the lockdown, all eyes are now on a complementary fiscal package by the government, especially for the small businesses, which are finding it difficult even to pay wages, rentals and for utilities.

The extension of the lockdown has triggered fresh demand for further relief to poor, self-employed and undocumented migrant labourers, who have been rendered jobless.

Follow live updates on coronavirus

There is also demand for measures like the introduction of COVID bonds to raise funds to rescue affected businesses and more government-backed bank loan guarantees to small and medium enterprises to tackle the crisis.

Finance Minister Nirmala Sitharaman’s (in picture) meeting with Prime Minister Narendra Modi on Thursday raised hopes of another round of fiscal incentive sooner than later. However, a press briefing by RBI and announcement of certain incentives by the central bank appeared to have postponed the fiscal stimulus by the government by a few more days.

Follow the state-wise total of confirmed coronavirus cases here

Soon after the Governor concluded his press briefing, a senior finance ministry official said, the stimulus has to be provided in a calibrated manner.

“The government cannot exhaust all its resources now. We need to keep ample resources in hand for the reconstruction phase of the economy after the present crisis gets over,” the official privy to the development, said.

He, however, did not rule out some more incentives for the poor and small businesses struggling in the lockdown.

Businesses, however, have been demanding an additional financial package of around Rs 10 lakh crore to overcome the crisis and start a fresh.

The International Monetary Fund has reiterated that India should ease its fiscal stance and announce a stimulus package to counter the sharp slowdown in economic growth and job losses expected from the nationwide lockdown.