Modi Promises $266 billion to protect the economy from COVID-19. He said is committing $266 billion to prop up its ailing economy during the coronavirus pandemic.
Prime Minister Narendra Modi on Tuesday addressed the nation that $266 billion would be used to protect the economy.
It was during the national addressing that took place on Tuesday evening, he announced the headline figure.
Measures are yet to be detailed. new measures and efforts will take place.
Steps will be taken from India’s central bank to shore up liquidity, as well as an earlier stimulus package worth $23 billion meant to help the country’s poor.
“This package will work to bring about a self-reliant India,” Modi said, without providing further information about what exactly the commitment would contain. Finance Minister Nirmala Sitharaman is expected to announce more details later on Wednesday.
Modi said the fiscal and monetary stimulus package is equivalent to about 10% of the annual output of India’s economy.
Analysts at Citi, though, say the actual impact could be closer to 4% of GDP after accounting for the relief measures that India has already taken, as well as the possibility that some expenditure could be spread across more than one fiscal year.
“Given India’s fiscal position, it is difficult to imagine that there is space for 10% of GDP additional spend” this year, they wrote in a research note. Even so, the Citi economists said that a 4% commitment would still be much higher than what they expected India to spend on insulating its economy from virus-related fallout.
The International Monetary Fund projects India’s economy will grow by just 1.9% this year.