Hyderabad: Indian government may roll out an economic stimulus package of over Rs 1.5 lakh crore ($19.6 billion) to fight a downturn in the country that is locked down to stem the spread of coronavirus, Indian media said quoting Reuters.
The government has not yet finalised the package and discussions are ongoing between Prime Minister Narendra Modi’s office, the Finance Ministry and Reserve Bank of India (RBI).
The stimulus plan could be as large as Rs 2.3 lakh crore, but final numbers are still in discussion. The package, which could be announced by the end of the week, will be used to put money directly into the accounts of more than 100 million poor and to support businesses that are hit the hardest by the lockdown.
The government will also increase its borrowing plan for the fiscal year 2020/21, which starts from April 1, from the current planned gross borrowing of Rs 7.8 lakh crore.
The Centre had asked the RBI to buy some of the government securities being issued, a move not undertaken by the Indian central bank in decades, due to fears of inflation spiking. The government could also use the central bank’s ways-and-means facility, an overdraft facility the RBI offers to the state, if it faces a cash crunch.
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