India unveils fresh INR730bn-economic stimulus package

• India 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 INR250bn on roads, ports and defence projects, and offering INR120bn in interest-free 50-year loans to state governments for spending on infrastructure before 31 Mar 21.
• “All these measures are likely to create an additional demand of INR730bn,” Sitharaman said, adding the proposals would stimulate demand in a “fiscally prudent way.”
• The latest package would not require any extra borrowing by the federal government, Tarun Bajaj, economic affairs secretary at the Ministry of Finance, told reporters.

External Link : https://www.reuters.com/article/india-economy-finmin/india-announces-economic-stimulus-to-boost-demand-by-10-billion-idINKBN26X0UP