FM Nirmala Sitharaman likely to unveil another stimulus to bolster India's economy
Finance Minister Nirmala Sitharaman will soon announce the next stimulus package to boost India's coronavirus-hit economy, Economic Affairs Secretary Tarun Bajaj said on Tuesday.
The Finance Ministry is looking into suggestions and requests received from various sectors of the economy, he said at a virtual conference with media.
"We are actually discussing that. It is difficult for me to commit a date but we have received a lot of requests and comments from various sectors and we are looking into it. Very soon it will be unveiled. The finance minister will come out and speak to you on that," he said.
The finance minister had last month announced a slew of measures to spur demand and ramp up capital expenditure. This was the third stimulus package since the outbreak of the COVID-19 pandemic.
The government had announced a Rs 1.70 lakh crore Pradhan Mantri Garib Kalyan Yojana (PMGKP) in March to protect the poor and vulnerable sections from the impact of COVID-19 crisis.
It was followed by the Aatmanirbhar Bharat Abhiyan package of Rs 20.97 lakh crore in May, largely focused on supply-side measures and long-term reforms.
The finance minister last month said the option for another stimulus package has not been closed. "I have not closed the option for another stimulus package if it comes out to be, because every time we announced one, it has been after a lot of consideration of inputs from various sections of society.
"Then we sit and work it out within the ministry and Prime Minister's Office and take a final call. So, I have not closed the option to come up with one more stimulus," Sitharaman had said.
Finance Minister Nirmala Sitharaman
Terming elevated food prices a temporary phenomenon, Tarun said they should soon be back to normal on the back of arrival of new crops and government measures for improving supply of essential commodities.
Some commodities like onion, potato and tomato are as expensive as Rs 100 per kg, much higher than the average price.
"I think this should be temporary in our view... there is actually a difference between the WPI and the CPI. So, that itself shows that this should be something to do with logistics and with a good agricultural season and the new crop, we are hoping this should cool down," Tarun said.
He added that agriculture and consumer affairs ministries had also announced some steps to cool down prices.
Stage set for rebound
On recovery, Tarun said India was continuing to see an uptick in the economy over the past few months since the unlock began and there would be further improvement in the months to come.
"We are actually seeing an improvement in all parameters and expecting further improvement in November...this should continue. Hopefully, the economy should be back on rails and is moving much faster than what was anticipated."
Last month, the International Monetary Fund said the Indian economy, severely hit by the coronavirus pandemic, was projected to contract by a massive 10.3 percent this year.
However, it projected a rebound to 8.8 percent in 2021. Last financial year, India witnessed a growth rate of 4.2 percent.
Last week, the finance minister had said there were visible signs of revival in the economy and the GDP growth may be in negative zone or near zero in the current fiscal.
TArun said, "We continue to see an uptick in the economy since the past few months since the opening up of the economy. The manufacturing PMI has touched 58.9, which is the highest in the last decade. The power consumption in the month of October is 12.10 percent more than October 2019, which is a signal of economic activity."
He said the India growth story was intact despite the COVID-19 crisis and there was a lot of interest from investors from across the world.
"In spite of COVID, we find that there is a lot of interest, a lot of traction, there are a lot of enquiries from investors...a lot of deals are being talked about.[Our] growth story is intact and others are ready to invest into India during these times," Tarun said.