coronavirus: Government tracks package rollout to gauge impact on ground

Economy


NEW DELHI: The government is closely monitoring economic activity as a gradual relaxation in lockdown leads to reopening of businesses to see how the Rs 20 lakh crore package announced by it is rolling out on the ground.

Officials said the focus is on implementation of the measures announced in the package before any fresh ones are undertaken. “Focus, right now, is to implement the various elements of the package… A number of them need cabinet approval. So, the process has been set in motion,” said one of the officials.

Respective departments and ministries are keeping a close tab on data such as credit offtake, power consumption, agricultural activity, fuel consumption and goods and services tax payments.

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Another official said it needs to be assessed as to how the steps taken play out before anything more is done. “Fresh measures will have to wait,” the official said. The government hopes to get early feedback on the stimulus measures from the data as the economy emerges from the lockdown.

The recent data has shown some improvement—fuel consumption has picked up in May while peak power demand is close to pre-lockdown levels.

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SBI Research estimates GDP could contract over 40% in the April-June quarter while for the whole year, there could be a 6.8% contraction. Ratings agency Crisil expects a permanent real GDP loss of 10% in FY21 and a contraction of 5% for the year.

SBI Research expects another round of stimulus later in the year. Indian industry, hit hard by the pandemic and a nationwide lockdown announced to contain its spread, had sought a relief package of as much as 10% of GDP, including cash transfers to vulnerable sections of the population and tax relief.



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