PM Modi announces Rs 20 lakh cr special economic package

Prime Minister Narendra Modi announced a special economic package worth over 20 lakh crore rupees and 10% of India’s GDP in view of the coronavirus pandemic.

He said the package would provide relief to almost every segment of the population. He added that the details of the package would be announced in the next few days by the Finance Minister.

Prime Minister Modi also appreciated the sacrifices and commitment of migrant workers, labourers and others facing the virus outbreak. He said that Coronavirus is going to be a part of people’s lives for a long time, but lives cannot simply revolve around it.

He added that Lockdown 4 will be different and have new rules and the people will be informed about it before May 18.

Prime Minister Modi said that in a world that is fighting life and death, India’s medicines have brought a new hope. He added that every Indian feels proud when India is praised everywhere in the world. He appealed to Indians to come forward and take on the responsibility of building a self reliant India.

The PM said Covid-19 was a crisis, but offered the country the opportunity to make 21st century an Indian century by becoming self-reliant, by realizing the dream of ‘Make in India’.
He said it was time to undertake “bold reforms” in “land, labour, liquidity and laws”, reform the entire agriculture supply chain, rationalise tax systems and make the financial systems stronger. Recently, Bharatiya Janata Party (BJP)-led state governments proposed changes in labour laws. Faced with stiff opposition, the Modi government had dropped its bill to reform land acquisition laws in the first year of its first term in 2015.

The cumulative size of the stimulus package, plus the announcements made earlier by Sitharaman and the RBI, will be around Rs 20 trillion, or 10 per cent of GDP if one takes the 2019-20 revised nominal gross domestic product estimate of Rs 204 trillion.
For context, the largest Covid-19 stimulus package, as a percentage of GDP, was announced by the United States Federal Reserve. As per data portal Statista, it was pegged at 11 per cent of GDP, that of Australia was at 9.7 per cent, Brazil was at 3.5 per cent.

The earlier thinking in the government was that instead of such mega-packages, the Centre should go for smaller, targeted announcements. This changed because of three factors. First, the increase in borrowing programme for FY21 to Rs 12 trillion, from Rs 7.8 trillion, has given the government more room to spend. Second, the Centre has a better idea of how deep the economic slump is and will be. And third, with the economy gradually being opened up, industries, especially small businesses, will need all the support they can get.
Modi said going ahead an “aatmanirbhar Bharat” is now “the only way”.

To reinforce how India had both the will power as well as ability to accomplish this, Modi said India produced negligible N95 masks and PPE kits when Covid-19 started spreading, but now manufactures 200,000 such masks and kits daily.
He said local manufacturing, local markets and local supply chains proved to be the saviors during the lockdown period, and we need to make “local” our life mantra. He said all the current global brands were also “local” at one point, and Indians can learn from how people abroad took pride pride in them and made them global.

Modi said the definition of ‘self-reliance’ has changed in the world, and people have started discussing about “money-centric globalisation’ versus “human-centric globalization”. He said the world is looking at India with hope since Indian civilizational ethos has always espoused self-reliance, but with the spirit of vasudhaiva kutumbakam, or the world is one family.
The PM stressed the importance of stronger demand-supply chains. He said the need of the hour was to increase demand, and for this each stakeholder of the supply chain will be strengthened. He promised reforms in agricultural supply chain, rational tax systems, better financial systems to attract investments to pave the way for India to be a bigger player in the global supply chain.
“We will wear masks, maintain do gaz doori, but we will not let our aims and aspirations be forgotten,” Modi said.