PM-FM meeting soon to decide second stimulus package

The stimulus package is expected anytime this week and will be aimed at the urban and rural poor; disadvantaged sections of society; MSMEs and some of the worst-affected sectors.

Prime Minister Narendra Modi and Finance Minister Nirmala Sitharaman are expected to meet soon to finalise the details of a second stimulus package to mitigate the impact of COVID-19 on the economy, Business Standard has learnt.

The meeting is also likely to be attended by senior officials from the finance ministry and the Prime Minister’s Office.

The stimulus package is expected anytime this week and will be aimed at the urban and rural poor; disadvantaged sections of society; micro, small and medium enterprises (MSMEs); and some of the worst-affected sectors.

Late last month, Sitharaman had announced a Rs 1.7 trillion stimulus package, which included measures like free foodgrain and direct cash transfers for targeted beneficiaries, and an increase in wages under the employment guarantee programme.

A senior government official said this would not necessarily be the last COVID-related stimulus package.

A call on further measures will be taken later, and could even be announced after the lifting of the lockdown.

The measures that are being finalised could include easier access to credit for MSMEs, and further cash and food transfers, sources said.

“There is a proposal for another hike in MGNREGA payments,” an official said.

To create some rural jobs, officials said the construction of rural roads during the lockdown period, with the help of MGNREGA workers, was being considered.

The resumption of economic activity from rural areas, they said, was the safest bet since COVID-19 hotspots were mostly centered in urban or semi-urban areas.

The government has relaxed almost all agriculture activities from the purview of the lockdown and whatever is left will also be removed from the curbs in the next few days.

A blanket approval of farming activities is on the cards to enable smooth harvesting of rabi crops.

That apart, another senior official said the focus was now on preventing distress sale by farmers which would impact their incomes and, thereby, the overall rural sector.

Hence, some steps regarding the food logistics and transportation system could also be announced.

“Steps to incentivise farmers to store their produce for longer durations so that they don’t sell their produce in a hurry are being considered at the highest level,” a second official said.

That apart, ways through direct purchases of fruits, vegetables and also cereals by big companies and retailers, without going through the mandi system, are being considered for which retailers might also be granted some concessions.

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