Accordingly Finance minister Nirmala Sitaraman on thursday met prime minister narendra modi amidst rising demand for a ‘fiscal relief package’ to addresses acute distress faced by industrial and service sector as well as the economically disadvantaged section of the society. Sources in the government have told that a financial relief package is in the offing. They, however, have added that the PM Modi-led government may not go for one big-bang package but instead announce a series of ‘booster doses’ for sectors and segments in a phased manner.
While the bank OF INDIA' target='_blank' title='rbi-Latest Updates, Photos, Videos are a click away, CLICK NOW'>rbi is likely to announce monetary moves like working capital relief for MSMEs and others, the government may go step by step as it would not want to waste its firepower in a dynamic situation dictated by the novel coronavirus spread. The PM is expected to take a final call on proposed measures. In a first clear admission, one of the core team officials admitted that though the lockdown has been extended for 19 days, restrictions may not be completely lifted after May 3. “The pandemic and restrictions may not vanish completely by the end of the first half of this year. This may lead to longer spells of containment, tough financial conditions, and gaps in supply chains”.
Moreover the biggest crisis unfolding due to coronavirus pandemic is in the small and medium industries. Manufacturing, other industries and services account for 42% employment in the country and almost 70% of the GDP. A senior government advisor told india Today, “The Centre plans to avert a situation in which cash crunch converts itself into insolvency for small and medium scale industries. Their balance sheets are in tatters and they may belly up by the time the extended lockdown ends.”
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