City Express News
The government is reportedly preparing an economic relief package for sectors that have been hit hard by the second wave of Covid-19 in India. The plan is still in the early stages and no timeline has been shared for an announcement on this.
New Delhi,May 25, 2021:The government is in the early stages of preparing a fresh Covid-19 economic relief package to tackle the impact of the second wave.
The economic package is being prepared with an aim to support key sectors of the economy that have been hit by localised lockdowns during the second Covid-19 wave in the country, according to people quoted in a Bloomberg report.
Some sectors that are being focused on are tourism, aviation, hospitality sectors along with small and medium-sized companies. The discussions are still in the early stages and no timeline has been shared for the announcement of the economic relief package.
It may be noted that the second wave of Covid-19 in India has taken a greater toll on the economy compared to what was expected earlier. While no national lockdown has been announced, at least 98 per cent of the country remains under some form of lockdown.
This has had a severe impact on the sectors mentioned above and unemployment has also spiked as a result. Small and medium-sized enterprises have also started facing severe losses due to lack of operations and mobility during the second wave.
Besides job losses, the rising cost of healthcare during the second wave of the pandemic has also impacted consumer sentiment.
An SBI report recently flagged concern about higher prices of key essential commodities and said that it will impact demand for non-essential goods. All of these factors are likely to slow down the economic recovery momentum in the long run.
A number of international ratings agencies have downgraded India’s growth forecast for FY22 in view of the rising economic burden on the economy due to the overwhelming second wave of Covid-19 in the country.
The Bloomberg report also suggested that Finance Minister Nirmala Sitharaman had recently held discussions with economists regarding an economic relief package.
The report further highlighted that the Reserve Bank of India (RBI) is also facing pressure to ease loan repayment rules for sectors that have been badly hit by the second Covid-19 wave.