India will spend 10% of its GDP to revive its coronavirus-hit economy

Communication is the key.
Communication is the key.
Image: REUTERS/Amit Dave
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Indian prime minister Narendra Modi today (May 12) announced a Rs20 lakh crore ($266 billion) economic package (cumulative of other recent measures) to revive the Indian economy in the aftermath of the Covid-19 lockdown.

Modi said this package for a “self-reliant India” was especially aimed at labourers and farmers of the country. “It will also help the middle class which pays taxes honestly and contributes to the development of the country,” the prime minister said during a half-an-hour-long nationwide address.

Finance minister Nirmala Sitharaman, he said, will share the details of the package starting tomorrow. This Rs20 lakh crore package is inclusive of the various measures announced in the wake of the pandemic, including the Rs50,000 crore special liquidity facility for mutual funds declared by the Reserve Bank of India on April 27.

In his third televised address since March 24, Modi lauded India’s efforts at dealing with the pandemic and said it has turned the tragedy into an opportunity. “Before the outbreak, we didn’t have PPE (personal protective equipment) or enough N95 masks. Now we are producing at least two lakh of protective equipment on a daily basis.”

Significantly, Modi also announced that the ongoing lockdown will not end on May 17 as planned earlier. The details of the extension will be shared with the country before May 18, he said.

This will be the third extension of the ongoing nationwide lockdown.

“The fourth phase of the coronavirus lockdown in India will be completely different from the earlier three phases of the lockdown,” Modi said.

Modi’s latest address comes after his meeting with the chief ministers of all states on May 11 to take stock of the situation. “The chief ministers in their suggestions on the economy have sought support to medium and small businesses, infrastructure projects like power, easing of interest rates on loans, and assured market access to the agricultural produce,” according to a press release by the press information bureau of India.

Crisis continues

The lockdown extension comes at a time when India continues to register an increase in the number of coronavirus patients.

As of today, there were 70,756 confirmed cases in India. Union health minister Harsh Vardhan said today that the country’s Covid-19 mortality rate was one of the lowest in the world at 3.2%. At present, India has a total of 2,293 deaths due to the Covid-19.

“Our recovery rate is getting better every day. Today our recovery rate is at 31.7%. In the fight against Covid-19, our mortality rate is almost the lowest in the world. Today the mortality rate is around 3.2%, in several states it is even less than this. The global fatality rate is around 7-7.5%,” Vardhan said.