





Cogencis, Friday, Mar 27

By Tushar Chakrabarty

NEW DELHI – The government is working on a relief package for the industry that can be twice the size of the 1.7-trln-rupee measures announced on Thursday that had aimed to help the poor deal with a nationwide lockdown, a senior government official said.

The government announced a 21-day nationwide lockdown on Tuesday to curb spread of novel coronavirus in India.

Under the new package, the government is likely to pay a part of the wages of the workers to ensure that they are not laid off due to industry-wide production cuts, the official told Cogencis.

"The idea is that the workers can take some pay cut for working lesser number of hours but the rest of their wage is shared between the employer and the government. This would ensure that they keep their jobs," the official told Cogencis.

The package may be announced by the government within a week, the official added.

Several companies have suspended or drastically scaled down their operations in compliance with the government’s directions on lockdown. Only essential services such as banks, ration shops, grocery stores and pharmacies are exempt from the lockdown.

The government is yet to take a call on the wage threshold below which it will bear the cost of compensating workers, the official said.

"The final outlay for the package will be decided based on this threshold. But it is likely to be higher than what was announced in the welfare package," the official said.

On Thursday, Finance Minister Nirmala Sitharaman announced a relief package for the poor in the first significant step towards mitigating the economic fallout emanating from the lockdown. The package primarily comprised of direct cash transfers and provision of food grain.

Also, in an unscheduled meeting today, the Reserve Bank of India’s Monetary Policy Committee decided to cut the policy repo rate by 75 basis points to 4.40% while the reverse repo rate was cut by 90 basis points to 4.00%.

RBI Governor Shaktikanta Das said that all instruments, conventional and unconventional, are on the table to mitigate the economic impact of coronavirus.

Das also said that due to the steps taken to control the spread of the pandemic, the growth forecast for 2020-21 (Apr-Mar) was now at risk.

Moody's Investors Service today said it sees India's GDP growing a mere 2.5% in 2020 due to the 21-day lockdown. For 2021, Moody's projected India's GDP growth at 5.8%.

The total number of coronavirus cases in India has steadily increased to 724 with the disease claiming 17 lives so far. End

Edited by Arshad Hussain