India: Govt’s new round of stimulus to boost economy further

The stimulus would come in the form of tax relief on select home sale deals, enhanced credit guarantee programmes for small businesses, incentives for new job creation and additional fertiliser subsidy, said finance minister Nirmala Sitharaman.  

Including the already announced production-linked incentive scheme for manufacturing units of Rs2.65 lakh crore (USD$35.5 billion), the cumulative stimulus package announced since the lockdown would total about Rs30 lakh crore (USD$400 billion) or 15% of India’s GDP, said Times of India.   

Sitharaman said an increase in tax collections for goods and services, higher energy consumption, a rise in the purchasing managers’ index, improved bank credit and a stock market surge all suggested that stimulus measures taken so far have helped. 

READ: India has entered a technical recession for the first time, says RBI official

Despite Sitharaman’s buoyant tone, markets initially weakened before recovering some ground following the announcement of additional job creation.