Coronavirus: Nirmala Sitharaman Meets PM Modi for Bigger Economic Package to Counter Impact

New Delhi: Finance Minister Nirmala Sitharaman is holding a meeting with Prime Minister Narendra Modi as the central government finalises an economic stimulus package that businesses have been pitching for to stay afloat.

The upcoming stimulus will likely focus on the concerns of micro, small and medium enterprise (MSME) segments, as well as provide relief to the travel and aviation sectors that have borne the maximum brunt due to the economic shock caused by coronavirus.

While the demand has been to unveil a package of Rs 9-10 lakh crore, the government may announce interim measures first for the sectors hit hard by the outbreak and the subsequent lockdown.

Officials have said the next economic package would be bigger than the Rs 1,70,000 crore worth of schemes announced by Sitharaman last month focusing on providing food security to the poor and providing money in their hands to fight the Covid-19 impact.

The catastrophic effect of the lockdown on the overall economy and livelihoods of lakhs of workers has triggered severe concerns, following which a number of state chief ministers in their video conference with Modi on Saturday had also sought some sort of relaxation for a number of sectors.

While the government on Wednesday said that it will open certain sectors from Monday to ease the hardships of daily wagers and farmers, India Inc has also been demanding relief for it to survive what forecasts have said will be the worst slowdown in the Indian economy.

“It is important for the government to announce an economic relief package immediately to ensure that companies don’t get into a mentality of scarcity and start laying off employees,” Sangita Reddy, joint managing director, Apollo Hospitals Group and president of the Federation of Indian Chambers of Commerce and Industry (FICCI) told CNBC-TV18.

Estimates show that India may be losing close to Rs 40,000 crore daily due to the national lockdown with an estimated loss amounting to Rs 7-8 lakh crore during the past 21 days, said Reddy.

Businesses want greater bank credit to provide wages which could be interest and collateral free in the case of small firms, a six-month deferral of tax dues without penalty, suspension of the bankruptcy code for six months and liberal handouts to needy households to support demand.

The demand side measures could include tax breaks for taxpayers and relief from duty on major items of consumption. Also, measures to provide more strength to the capital market may also be considered.

A senior official from the finance ministry said that regularly interactions have been held with various economic ministries and they are getting inputs from them over measures required to give stimulus to the economy in this difficult period.