Finance Minister in talks with PMO for a second financial stimulus package: Report

Officials from the Finance Ministry and the Prime Minister’s Office have reportedly met several times in the past week to take a holistic view of the economy amid the pandemic.
Finance Minister in talks with PMO for a second financial stimulus package: Report
Finance Minister in talks with PMO for a second financial stimulus package: Report
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Will there be one more financial stimulus package from the centre to protect people from the impact of coronavirus and the lockdown imposed to curb the spread of the same? A Livemint report claims of such a possibility since there have been conversations going on between the officials in the Finance Ministry and the Prime Ministers Office (PMO). These discussions are said to have involved FM Nirmala Sitharaman herself.

Many critics of the Modi government had remarked that the Rs 1.7 trillion package announced by the FM immediately after the lockout was implemented as too meagre and wanted the government to open the treasury to contain the serious economic fallout of the situation.

The toss-up between short-term financial profligacy and long-term fiscal prudence will definitely be on the table. On top of all these, the lockdown, even if fully or partially lifted will end up further reducing the revenue collections for the government.

And this comes even as the slowing down of the economy for the past several quarters have meant there is less revenue to play around with. Moreover, expected revenues from disinvestments like Air India etc, will also most likely take a lot more time to fructify. It is under these circumstances that the government is under pressure to loosen the purse strings.

There have also been reports that the government is mulling certain austerity measures starting from right at the top. The use of IAF aircraft by the PM and the President may be reviewed; Union Ministers may be stopped from travelling unless it is essential and so on. The government also announced that there will be a 30% cut in the salaries of PM, ministers and MPs for 2021. The President of India, Vice president and Governors too have voluntarily cut their salaries by 30%.

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