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QINGDAO TODAY
在线翻译:
szdaily -> World Economy -> 
India to spend US$265b to aid economy
    2020-05-14  08:53    Shenzhen Daily

INDIAN Prime Minister Narendra Modi’s government will spend a total of 20 trillion rupees (US$265 billion) to help Asia’s third-largest economy weather the fallout of the coronavirus pandemic.

The package amounting to 10 percent of the nation’s gross domestic product will help the economy get back on its feet after weeks of stay-at-home restrictions, Modi said in a televised address to the nation Tuesday, without giving details.

The figure announced by Modi will include measures already unveiled by the government and also by the central bank such as provision for cheap cash to banks and the reduction in its cash reserve ratio.

“This economic package will be a crucial link in the creation of a self-reliant India,” Modi said, adding that the finance ministry will unveil details. “It will focus on areas like land, labor, liquidity and law.”

The spending plan coupled with proposed tax breaks for new plants, and incentives for overseas companies is an attempt by Modi’s administration to lure investors and stop the coronavirus pandemic from wrecking the economy. India is hurtling toward its first full-year contraction in four decades. An estimated 122 million people lost their jobs in April while consumer demand has evaporated.

The “package is not all new spending,” said Akhil Bery, a Washington-based analyst at Eurasia Group. “A significant portion is expected to be spending that is already budgeted but merely moved up.”

Measures already announced by the Reserve Bank of India and the government add up to US$102.6 billion, Bery said and expects the bulk of the new package to focus on supporting workers and small and medium-sized enterprises through steps like unemployment insurance for laid off workers and incentives for companies to keep workers on their payrolls.

Modi has also come under criticism on the pain inflicted on India’s poor due to the sustained lockdown since the end of March. In the past few days, the movement of millions of migrant workers from the cities where they had jobs to their homes in rural villages — and their reluctance to return — have dominated news.

Meanwhile, companies have been urging the government for weeks to increase support measures. While Hero MotoCorp Ltd., India’s top motorcycle maker, had sought a “suitable stimulus package,” lobby group Associated Chambers of Commerce and Industry of India wanted at least a US$300 billion package. (SD-Agencies)

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