In a televised address to the nation on Tuesday evening, PM Modi had announced Rs 20 lakh crore – equivalent to 10 per cent of India’s GDP – in fiscal and monetary measures to support an economy badly hit by the 50-day lockdown to fight the spread of Covid-19.
The PM said the package will focus on land, labour, liquidity and laws and has been designed to keep in mind various segments of the society like the cottage industry, small-scale industry, MSMEs, labourers, farmers, middle-class taxpayers and Indian industries.
He also gave a push to local products, as he said India mission should be becoming self-reliant (Atma Nirbha Bharat). Spelling out the details, Modi had said the self-reliant strategy will depend on five pillars: growing a new economy, creating a state-of-the-art infrastructure, setting up a technology-based delivery system, leveraging the young demography and by exploiting domestic demand. PM Modi had said the details of the package would be shared by Sitharaman.
In a series of tweets after Modi’s address, the finance minister on Tuesday said “this shall not be just a financial package, but a reform stimulus, a mindset overhaul, and a thrust in governance.”
“Indian economy has acquired strength in its various dimensions. Now, we can confidently engage with the world. We aim at overall transformation & not incremental changes. We shall convert the pandemic challenge into an opportunity. #AatmanirbharBharat will integrate not isolate,” Sitharaman had tweeted.
The lockdown imposed on March 24 that led to closure of shops, factories and services, such as tourism, eateries and public transport, led to a devastating impact on the economy with thousands of companies staring at bankruptcy and millions losing their jobs.
Data from the Central Statistics Office showed on May 12 that the country’s unemployment rate touched 27.1 per cent in the week ended May 3 – the highest ever – indicating a bloodbath in the wake of the coronavirus pandemic and the lockdown.
Not surprisingly, India’s factory output, a key measure of economic activity, shrunk by 16.7 per cent, data from the Central Statistics Office showed on May 12, signalling that a widespread shutdown had bit the economy hard.