Narendra Modi, India’s prime minister, has announced plans for a $266bn stimulus package to help the country’s stalled economy recover from the lockdown imposed to slow the spread of coronavirus.
In a television address on Tuesday, the prime minister said India had to seize the opportunity presented by the pandemic to overhaul its economy, undertake “bold reforms” and ensure this would be “India’s century”.
The package is equivalent to about 10 per cent of India’s gross domestic product. “Coronavirus is going to be part of our lives for a long time, but we can’t let our lives revolve around it,” he said.
Mr Modi gave no precise details of the economic package, which he said would be unveiled by finance minister Nirmala Sitharaman in the coming days, starting from Wednesday.
Mr Modi has been holding consultations with ministers and officials in recent days, aimed at laying out strategies for how India could woo new manufacturing investments from companies looking to diversify their global supply chain, and reduce their dependence on China.
India has approached potential investors in the US, Japan and elsewhere, touting the south Asian country as an alternative to China.
“They are trying to cash in on China’s diminished status and the leverage they can extract from that,” said Saurabh Mukherjea, chief executive of Marcellus Investment Management. “It is a multi-faceted package — not just sops and financial dole-outs, but benefits in kind, including subsidised land for investors — domestic and foreign.”
India is in week eight of an anti-coronavirus lockdown that has brought the economy to a near standstill. It has also created a massive humanitarian crisis with an estimated 140m people losing their jobs, including millions of vulnerable migrant workers who were left stranded without work or wages.
Stranded people stand in queues to enter the railway station in New Delhi on Tuesday as the country’s huge rail system ground back to life © Sajjad Hussain/AFP/Getty
Industrial production contracted almost 17 per cent in March year-on-year, according to data released on Tuesday, highlighting the extent of the damage. Analysts forecast the drop would be more dramatic in April and May.
Business groups and social activists have been calling on Mr Modi’s government to unveil a relief and stimulus package, to aid both vulnerable households and companies hit by huge income falls.
Mr Mukherjea said details were likely to be released in a series of announcements. “I suspect that a lot of the deals are still being cut in terms of how much of the package is still going to what sector,” he said.
India’s confirmed coronavirus caseload has risen steadily despite its lockdown, with fresh cases rising in recent days to more than 71,600 confirmed infections. Some 2,320 are confirmed dead. Public health experts fear a more rapid surge of cases as India moves to ease restrictions.
But Mr Modi said India had to look forward and build a strong, self-reliant country that could compete globally.
He also urged Indians to purchase locally made products. “From today all Indians have to be vocal about local. Not only by buying local but by advertising that as well,” he said.
Additional reporting by Jyotsna Singh
