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Covid-19: India Finalises Package to Stimulate Economy, Sets Aside $2.6 Bn For Labourers

© AP Photo / Ajit SolankiAn Indian man displays Indian currency notes of 1000 and 500 rupees as he stands in queue to exchange or deposit discontinued currency notes outside a post office in Ahmadabad, India, Thursday, Nov. 10, 2016.
An Indian man displays Indian currency notes of 1000 and 500 rupees as he stands in queue to exchange or deposit discontinued currency notes outside a post office in Ahmadabad, India, Thursday, Nov. 10, 2016. - Sputnik International
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Lead: New Delhi (Sputnik): Even though the government has not announced any specific stimulus package for the economy, the banking regulator has taken a number of measures to ensure liquidity for businesses. India is under lockdown until 17 May, but the government is slowly allowing relaxations.

The Indian government has finalised a stimulus package to revive the economy deeply impacted by the Covid-19 pandemic.

Sources in the Indian government have indicated that a stimulus package may be formally announced this week. Apart from various economic measures, the package is likely to include $2.6 billion for direct cash transfers to daily wage labourers.

An Indian Ministry of Finance source told Sputnik: “The economic stimulus package has been almost finalised.”

The package is likely to include a direct cash transfer to daily wage labourers stranded under the lockdown that began on 25 March, causing the immediate shutdown of factories and construction work. Many stranded labourers were left with no choice but to walk hundreds of miles home to their villages.

On 26 March, Finance Minister Nirmala Sitharaman announced relief measures worth $22.6 billion for the poor and marginalised sections of the Indian society.

The Indian economy was on the skids even before the Covid-19 pandemic hit the country. From a high growth rate of over 8.2 percent in 2018, growth had fallen to 4.7 percent in the fourth quarter of 2019 due to instability in the financial markets stemming from the collapse of finance companies like IL&FS and DHFL.

Meanwhile, the Reserve Bank of India (RBI) has taken a number of measures to ensure that businesses have ready access to cash. The bank has already cut benchmark lending rates and launched several liquidity windows linked to benchmark rates to provide affordable capital to businesses impacted by the pandemic.

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