Finance Minister Nirmala Sitharaman is addressing the media on the economic issues facing the country. Her press conference comes at a time when the country’s GDP or gross domestic product contracted a record 23.9 per cent in the April-June period as the quarter fully captured the damage caused by the coronavirus pandemic-related restrictions, and is expected to shrink an overall 9.5 per cent in the current financial year by the Reserve Bank of India. Economists and analysts await any positive signs in the economy to assess the path of economic revival ahead. The government is currently in the process of gradually lifting restrictions imposed in late-March to curb the spread of the deadly coronavirus, which has sent an already slowing economy marred by low demand into a standstill. The Finance Minister’s press conference comes ahead of a meeting of the GST or Goods and Services Tax Council due later in
By Aftab Ahmed and Manoj Kumar
NEW DELHI (Reuters) – India on Monday announced steps to stimulate consumer demand, including advance payment of a part of the wages of federal government employees during the festival season and more capital spending as it tries to bolster the pandemic-hit economy.
The government will allow its employees to spend tax-exempt travel allowances on goods and services, Nirmala Sitharaman, India’s finance minister told a news briefing.
She said the government will also shore up investment by spending extra 250 billion rupees ($3.41 billion)on roads, ports and defence projects, and offering 120 billion rupees in interest-free 50-year loans to state governments for spending on infrastructure before March 31,2021.
“All these measures are likely to create an additional demand of 730 billion rupees ($9.96 billion),” Sitharaman said, adding the proposals would stimulate demand in a “fiscally prudent way.”
Prime Minister Narendra Modi’s government, which imposed a