Speech by the Secretary of the Treasury shortly amid reports of new incentives

After several rounds of discussion, the government is nearing completion of the next stimulus package, the source said, adding that the magnitude of the stimulus could be much lower than the previously announced amount of Rs 20 lakh crore. The government could announce the reintroduction of the Pradhan Mantri Rojgar Protsahan Yojna in an expanded form, they said. Under this scheme, the government may grant a 10 percent subsidy on the PF premium for new employees and the employer, both.

Another source stated that the upcoming package may announce the Emergency Credit Line Scheme part-2. Under this arrangement, the government is likely to provide unsecured credit. Likewise, some special incentives for specific industries may be part of this package, the source added.

This would be the government’s third stimulus package after the Covid-19 outbreak.

The government on Wednesday approved a Production-Linked Incentive (PLI) plan for ten key sectors, including telecom, automotive and pharmaceuticals, bringing the total spend on such incentives to nearly Rs 2 lakh crore over a five-year period. The scheme is designed to encourage domestic production, reduce imports and create jobs while the government works to boost economic growth. The financial expenditure for the new scheme is Rs 1.45,980 crore.

The cabinet has also decided to extend the financing scheme for the quality of life deficit to the social infrastructure sectors. The scheme is currently only available for projects related to economic infrastructure.

The PLI scheme, Sitharaman had said, would encourage the critical sunrise sectors by providing the necessary government support, creating jobs and connecting India to the global value chain.

An RBI official said on Wednesday that India’s GDP is likely to shrink 8.6 percent for the July-September period, meaning the country has entered two consecutive quarters for the first time in history in the first half of this fiscal year. a recession would end. negative growth as a result of the coronavirus pandemic.

Researchers have used the ‘nowcasting’ method to arrive at the estimates ahead of the official release of data, and their views in an article in the RBI’s monthly bulletin released Wednesday does not constitute the central bank’s view.

The pandemic-induced lockdowns had resulted in a sharp contraction of 23.9 percent of GDP for the April-June quarter compared to the same period a year ago.

The RBI estimated that the economy would contract 9.5 percent over the full fiscal year. “India entered a technical recession for the first half of 2020-2021 for the first time in its history, with Q2 2020-21 likely to record the second consecutive quarter of GDP contraction,” said the article entitled Economic Activity Index. written by Pankaj Kumar of the Monetary Policy Department.

Source link