A day after the RBI projected economic contraction in 2020-21, Finance Minister Nirmala Sitharaman on Saturday said future fiscal policy actions to stimulate the economy will depend on how COVID-19 pandemic pans out. The government has already announced a Rs 20.97 lakh crore economic package, which includes Reserve Bank’s Rs 8.01 lakh crore worth of liquidity measures till May 17. Sitharaman said making a “realistic assessment” of economic growth would be difficult at this point of time as there is no clarity on when the pandemic would retreat.
“I’m not closing the door at all. I want to keep getting inputs from industry, implement what we have announced and depending on how things pan out we have to respond accordingly. We are only 2-month old in this year, we have 10 months to go,” Sitharaman said in a conversation with BJP leader Nalin Kohli.
The Reserve Bank on Friday had said the impact of COVID-19 is more severe than anticipated and the GDP growth during 2020-21 is likely to remain in the negative territory.
It projected some pick-up in growth impulses from second half (October-March) of 2020-21 onwards. Last week, the minister had announced an economic packages five tranches, which included a Rs 3.70 lakh crore support for MSMEs, Rs 75,000 crore for NBFCs and Rs 90,000 crore for Power distribution companies, free foodgrains to migrant workers, increased allocation for MGNREGS.