Indian Prime Minister Narendra Modi has announced that his government will spend Rs 20 trillion ($ 265 billion) to incentivize the economy following the Corona virus crisis. This is an amount equal to 10% of India’s GDP.
Modi announced the package of incentives in a televised speech without specifying her clauses. So far, measures amounting to only Rs.5 trillion have been announced by the government and the central bank, and are included in the amount Modi has named. Details of the incentives will be revealed later Wednesday.
The incentive program will be incorporated into new enterprise tax benefits and incentives for foreign companies, formulated as part of an effort to attract investors and stop the plague from destroying the local economy. India is progressing at an annual rate of economic decline – the first in 40 years. It is estimated that about 122 million Indians lost their jobs in April, with private consumption plummeting.
Modi was criticized for not giving details, as well as the moves to limit traffic – including a stringent closure from late March – that severely damaged India. In recent days, millions of workers have moved back from the cities where they usually work, to their homes in remote villages. Business sector companies have called on the government to increase incentives for the economy, and the amount Moody declared was greater than expected.
The Reserve Bank of India more than $ 50 billion in economy – about 3.2% of GDP. On March 26, the Indian Treasury introduced $ 22.5 billion in incentives.
On May 18, Moody is expected to announce measures to ease the closure, which will include continued restrictions on places where the pandemic is spreading, along with the release of other parts of the economy. On April 20, reliefs were announced to allow farmers and industry to operate in rural areas and districts where there is no contagion.
According to Johns Hopkins University, India, where 1.3 billion people live, the number of those diagnosed in Corona has doubled since May, to 74,441 – of which 2,310 have died from the disease.
Local companies have had difficulty reopening factories, mainly because of restrictions on travel, staff shortages, damage to supply chains and conflicting laws between different regions. India has started running a special train service that has transported workers to their homes. Yesterday the train traffic was resumed, almost two months after it was stopped.