Modi Govt's Rs 20 Lakh Cr Economic Package Third Largest In The World After Japan And United States

Prime Minister Narendra Modi on Tuesday evening announced a special economic package worth Rs 20 lakh crore to mitigate the economic damage caused by the novel Coronavirus.

Covid-19 crisis has prompted governments to plan aggressive economic stimulus packages. (File Photo/ Getty)

New Delhi: After World Health Organisation declared Coronavirus a Public Health Emergency of International Concern on 30 January 2020, several countries resorted to nationwide lockdown for days and weeks to contain the spread of the deadly disease. Though the measure was necessary, the lockdown forced the countries to shut several economic and commercial activities, resulting in loss of income for many. In-turn, major economies faced a huge possibility of recession post COVID-19 pandemic. The crisis has prompted governments to plan aggressive economic stimulus packages in order to revive the economy and avoid a catastrophic and historic global economic collapse. For the same, Prime Minister Narendra Modi on Tuesday evening announced a special economic package worth Rs 20 lakh crore to mitigate the economic damage caused by the novel Coronavirus.

The way ahead lies in LOCAL.

Local Manufacturing. Local Markets. Local Supply Chain. Local is not merely a need but a responsibility. Be vocal about local! #AatmanirbharBharat pic.twitter.com/eYqt5IDtBp — Narendra Modi (@narendramodi) May 12, 2020

The mega financial package of Rs 20 lakh crore, which is almost 10 per cent of India's GDP, appears to be among the largest stimulus packages in the world. It combined the government's recent announcements on supporting key sectors as also measures rolled out by the Reserve Bank of India (RBI). "I announce a special economic package today. This will play an important role in the 'Atmanirbhar Bharat Abhiyan'. The announcements made by the govt over Covid-19, decisions of RBI and today's package totals to Rs 20 lakh crores. This is 10% of India's GDP," PM Modi said. Committing to make the country self-reliant and self-sufficient, PM further said that the package will give emphasis on land, labour, liquidity, laws and will also focus on the farmers and the labourers who support the nation during the times of crisis. The package, that promises to give rise to a rational tax system, strong financial system besides encouraging businesses, is the most substantial financial packages announced across the world after United States, which is 13 per cent of its GDP and Japan, which is over 21 per cent of its GDP. ALSO WATCH | Lockdown 4.0, Economic Package: Highlights Of PM Modi's Address To The Nation The US has committed to the largest rescue package of any country by far with the three phases of congressional stimulus working out at $8.3 billion, $192 billion and $2.5 trillion, in a bid to deal with Coronavirus fallout as the US stock markets were hit hard with four circuit breakers triggered within 10 days. According to a CGTN reports, after US, South Korea on March 3 announced a 9.8 billion US dollar stimulus package, which includes business and child-care subsidies.  Similarly, Italy announced a 28-billion-U.S.-dollar plan on March 11 to revive the economic slowdown posed by COVID-19 lockdown. Other European countries such as France and Germany announced a 49-billion-U.S.-dollar and 610-billion-U.S.-dollar aid package to boost the economy and avert recession. The report further mentions of Australia has announced 11.4 billion U.S. dollar stimulus package on March 12 and a second stimulus package worth 54.2 billion U.S. dollars 10 days later, including business subsidies and loans. Commenting on the other countries' economic revival packages, the Chief Economic Advisor (CEA) to the government, Krishnamurthy Subramanian, says "the numbers floating around  are exaggerated." As quoted in a Business Today reports, Subramanian said that "People are saying that the UK package is 15 per cent of its GDP, but if you see the UK package carefully, the (15 per cent) number is not correct. The actual number is just 3.7 per cent of the GDP."