India Announces Billion Dollar Stimulus Package

India has just announced a new billion Dollar stimulus package that will work for the millions affected by the Coronavirus.

India’s new program will cost some 1.7 trillion rupees or more than USD $22 billion. The package was designed to help out people transition in and out of the new 21-day lockdown program.

This past Wednesday, a lockdown was placed in India. People are told to stay indoors for three weeks. Essential stores like groceries and gas stations will stay open. The government hopes that this will help slow down the spread of the Coronavirus. 

Many other countries are already enacting lockdowns. These include Italy, the Philippines, and even certain states of the United States. 

Nirmala Sitharaman, India’s Finance Minister, explained how the program would help people. First and foremost, most of it will be used to purchase food for households with low income. Apart from that, the money will also be transferred directly to some accounts. 

The Indian government is concerned with people growing hungry. They don’t want any of their citizens to go without food or money. 

Thus, the program will help out with their daily protein and grain requirements moving forward. The direct money transfer plan will also ensure that people will receive their money. The fact that it is a “direct transfer” will help stop leakages or delays in receiving the cash. 

Sitharaman explained with confidence that the package they have come up with will help take care of the immediate concerns that have arisen from the Coronavirus outbreak.

The Indian government hopes that the new stimulus package will alleviate some of the burden before their healthcare system totally breaks down.

It is said that the food distribution of the new package will affect 800 million people. 

There are already programs in place for the poor though. The new package has just improved upon it. 

For instance, low income households are already receiving 5 kg of rice or wheat every month. With the new program, they will be receiving an additional 5 kg per person for the following weeks. An additional 1 kg of pulses is thrown in the mix for free to help with health requirements. 

Sitharaman also shed light on the cash transfer program. She said that it was meant for a specific set of people. These include farmers, construction workers, low-income widowers, pensioners, and more. 

However, the new program also looks at one of the most important groups of people: the frontline workers in the Coronavirus outbreak. 

Of the USD $22.5 billion budget of the new program, a large chunk is being set aside for those frontline workers. An amount of 5 million rupees is being set aside for each worker’s insurance. These include nurses, doctors, and the hospital sanitation workers. 

While this new package stands to do a lot of good, it may not be enough. An economist in JPMorgan says that India will need more than USD $20 billion.

This economist helps to break down this statement. He says that a third of India’s economy will be affected by the lockdown. The 21 day duration is only a minimum. The lockdown could extend even more if the outbreak is not controlled.