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Fiscal package likely in festival season
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SME Times News Bureau | 26 Sep, 2020
A fiscal package to put money in the hands of the consumer in the festival season is on the cards.
The
package could be rolled out around Navratri which is the biggest
purchasing season for consumers and the economy going up till Diwali.
This would mean putting money into the hands of the people as income has
gone down for the salaried, migrant workers and small businesses. This
will also shore up demand for companies.
In October 2017, just
before Diwali, the government had announced cuts in GST rates on around
27 items, mostly consumer items, along with some other incentives.
In
September last year, again just around the festival season, Finance
Minister Nirmala Sitharaman announced a Rs 1.45 lakh crore corporate tax
rate cut, bringing in an early Diwali.
Markets are also
anticipating a fiscal stimulus. Joseph Thomas, Head of Research - Emkay
Wealth Management said on Friday, "The expectations of a further fiscal
package from the government ahead of the festival season is a factor
that may endow the markets with some strength".
Markets have been
wobbly in the past few trading sessions with the emergence of the
second wave of the pandemic and probability of geopolitical tensions
centering around Chinese stand off.
Fitch Ratings had indicated
that it is very likely that the government will have to spend a bit more
on fiscal measures to support the economy.
Earlier this month,
Ficci had underlined the need for a fiscal stimulus. Ficci said: "The
contraction seen in the country's GDP in the first quarter of the
current fiscal is matter of great concern and clearly underlines the
need for a major stimulus to energise and strengthen demand in the
economy."
As the Indian economy is progressively opening up in
phases, businesses are seeing improvement in some of their operational
parameters. However, the setback that has been caused to members of
corporate India on account of Covid-19 will require a much longer period
before one sees an improvement in performance on a sustained basis,
Ficci said.
Till that time, government and regulatory
institutions must continue lending strength to businesses through all
possible additional measures as well as improvising the already
announced set of measures basis feedback from all stakeholders.
Sangita
Reddy, President, FICCI said, "Reviving the economy requires a
sustained effort, especially when we have seen that in the first quarter
our GDP has suffered a major blow. In the absence of a major fiscal
push on the demand side, we could end up being stuck in a quagmire of
low demand and low-income cycles. If we have to return to the positive
growth trajectory, the time for bold and decisive action is now."
Prime
Minister Narendra Modi announced a Special economic and comprehensive
package of Rs 20 lakh crore - equivalent to 10 per cent of India's GDP
in May during the lockdown.
As part of the Rs 1.70 lakh crore
Pradhan Mantri Garib Kalyan Package (PMGKP), the Government announced
distribution of free food grains, cash payment to women and poor senior
citizens and farmers.
Around 41 crore poor people received
financial assistance of Rs 52,608 crore under the PMGKP. The Finance
Minister also said PMGKP used technology to do Direct Benefit Transfer
(DBT) to people.
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Customs Exchange Rates |
Currency |
Import |
Export |
US Dollar
|
66.20
|
64.50 |
UK Pound
|
87.50
|
84.65 |
Euro
|
78.25
|
75.65 |
Japanese
Yen |
58.85 |
56.85 |
As on 13 Aug, 2022 |
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