In his fifth address to the nation on Covid-19, Prime Minister Narendra Modi announced an economic package to “make India self-reliant” signaling that the government has shifted its coronavirus strategy from “survival” to “revival” mode. The details of the economic package will be unveiled in days to come.
PM Modi said if the latest package is added to the economic package announced recently by the government in the wake of Covid-19 crisis and the decisions taken by the RBI, “today’s package totals to Rs 20 lakh crore.”
He said, “This is 10 per cent of India’s GDP.”
Before we proceed, let’s recall some numbers.
PM Modi made it clear that the Rs 20 lakh package includes liquidity infusion by the RBI in phases recently, and also Rs 1.7 lakh crore package announced by Finance Minister Nirmala Sitharaman on March 27.
The RBI’s first major decision came even before coronavirus had become an Indian crisis. On February 6, the RBI announced measures to inject liquidity in the economy to the tune of Rs 2.8 lakh crore.
When coronavirus outbreak became an Indian phenomenon, the RBI announced on March 27 – the same day as Sitharaman announced the special package – to inject an additional liquidity of around Rs 3.75 lakh crore.
On April 17 and 27, the RBI infused Rs 1 lakh crore more liquidity through two separate announcements. The monetary value of all these announcements (Sitharaman plus RBI) comes at around Rs 9.75 lakh crore.
The rest, that is, Rs 10.25 lakh crore is likely to be the actual announcement made by PM Modi on Tuesday evening. Standalone, this is little over 5 per cent of India’s GDP.
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