By the time Prime Minister Narendra Modi addressed the nation this evening, urging citizens to fight the coronavirus disease while upholding human values and promising a “COVID-19 Economic Response Task Force”, his government had begun the response already. There was already a proposal doing the rounds of the finance ministry and revenue department to offer easier loan repayment terms and tax breaks for small- and medium-sized companies to help the country weather the outbreak of the novel coronavirus disease 2019.
The ministry will soon extend loan tenors and relax bad-debt norms for small companies, a source said, explaining that the central administration is under pressure to insulate the $ 2.7-trillion economy from the impact of the global pandemic. The is because, the source explained, not only had the US Federal Reserve reduced the lending rates, but also the US, China and Indonesia, are spending billions of dollars to stem a slide in the growth of their respective economies.
It’s a five-fold proposal.
|1. Loan payments for small businesses will be rescheduled|
2. Loan tenors will be extended and rescheduled
3. Bad-loan norms for small businesses will be relaxed.
4. Goods and services tax (GST) for hospitality and tourism companies will be slashed to a lower slab
5. Commercial vehicle aggregators will get loan repayment relief.
Micro-, small- and medium-sized businesses, which employ more than 100 million people and account for 45% of factory output and over 40% of the nation’s exports, which has made the government offer them special relaxations, the source said.
These economic measures assume significance amid the slide of local equities on Thursday and a weakening rupee touching a new low. These developments in the market owe to the routing of risk assets amid an increase in the number of coronavirus cases domestically.
India has reported 169 infections, while there are 2,11,713 cases worldwide and 8,700 odd deaths.
Today the prime minister not only focussed on keeping households, small businesses and industries afloat rather than let these economies slip into a recession like other governments across the world but also added a classic Indian touch to his appeal by urging the privileged class to not deprive the poor.
Economic measures worldwide
Meanwhile, US President Donald Trump had yesterday promised under his economic package cash payments of $ 1,000 or more to the citizens of his country as part of a $ 1.2 trillion stimulus plan.
The governments of Australia and Japan have promised handouts.
German Chancellor Angela Merkel has changed her economic policy too. She has dropped her loyalty to a balanced budget and is willing to discuss pooling the borrowing capacity of the euro area.