The Indian government is preparing a fiscal stimulus for the industrial sectors worst affected by the second wave of the pandemic, government sources said on Wednesday, May 26.
The sources said that the Ministry of Finance is working out the details of the fiscal stimulus package with specific focus on small and medium-scale manufacturing units impacted worst by the pandemic, although no timelines have been set for making the final announcement.
Indian rating agency Icra has forecast a two percent growth in gross domestic product (GDP) in the January-March quarter of 2020-21, but a 7.3 percent contraction for the full fiscal year of 2020-21.
The Reserve Bank of India (RBI) in a bulletin this month said that “the ferocity of the second wave has overwhelmed India”, adding that real economic indicators have moderated through April-May 2021.
According to the Indian central bank, the biggest toll of the second wave is seen in terms of demand shock, loss of mobility, lower discretionary spends, lack of employment and inventory accumulation across industries.