India's ruling Bharatiya Janata Party (BJP) is set to begin its stakeholder consultations with various segments of the economy on a stimulus package that is essential to helping industry fight the impact of the COVID-19 pandemic.
The feedback received from various economic sectors will be compiled by the party and submitted to federal Finance Miniser Nirmala Sitharaman.
A top source in the party told Sputnik on condition of anonymity that “Bharatiya Janata Party will begin its sectoral consultations very soon on stimulus measures needed amid the pandemic. We will discuss the likely impact on various sectors for the next one to three years.”
BJP is currently preparing a schedule for the meeting with the representatives of key sectors of the economy. This essentially means that the stimulus package would have to wait for some time and the government would not announce it as swiftly as it announced relief measures for the poor.
Business and industrial leaders, however, have said the government should immediately announce an economic stimulus package.
“By now the government should have announced the package. It is getting delayed. And the stimulus for industry, which has been severely hit by COVID-19 pandemic, should be in the form of tax cuts,” Niranjan Hiranandani, Managing Director of real estate firm Hiranandani group told Sputnik.
India's federal government and the Reserve Bank of India have already announced several measures to mitigate the impact of COVID-19. While government measures were focused on providing poverty relief in the form of food and cash entitlements, the RBI has focused on stabilising the financial markets in addition to reducing the benchmark lending rate by 0.75 percent, to ensure adequate liquidity in the banking sector.
Prime Minister Narendra Modi, in a televised address to the nation on 19 March, had announced the setting up of a task force under Sitharaman to understand the needs of industry and businesses at the time of the pandemic.
On 23 March, Modi interacted with these captains of industry. In the meeting, he acknowledged the fact that the “impact on the economy will be felt for some time to come”. Modi had said that sectors such as tourism, construction, and hospitality, as well as segments of the service sector and the informal sector, have been hit due to COVID-19.
Before that, on 21 March, PM Modi interacted with the Indian pharma industry and asked them to go about the “manufacture of testing kits for COVID-19" on a war footing.
COVID-19 is likely to slam the Indian economy, which had expanded by 4.7 percent in 2019. Sectors such as automobile manufacturing, telecommunications and financial services have ground to a halt. Beyond the 21-day lockdown, COVID-19 stands to have a long-term impact on the manufacturing, tourism, hospitality and aviation sectors, among others. Facing an acute revenue crunf, a number of aviation companies in India like Indigo Airlines, GoAir, and Spicejet have announced pay cuts.
The pandemic, which hit India on 30 January, has so far claimed 56 lives; to date, 2,300 people have tested positive for the infection, according to data released by the federal Health and Family Welfare Ministry.
