Sources said suggestions also include expanding the fiscal deficit target and relying on the Reserve Bank of India (RBI) to stagger loan re-payments for specific sectors, which have borne the brunt of the impact of the virus outbreak. “There are several recommendations. The task force set up to deal with the economic challenges will examine them and arrive at a decision,” said an official.
Sources said there is a view that the government should opt for the direct benefit transfer route (DBT) to provide urgent relief to those, who may have lost their livelihood or may get affected if the present crisis lasts longer. “If not 100% wage support, at least 50% can be provided for some time,” said a source.
They said the nearly 38 crore Jan Dhan bank accounts can be used for DBT to provide immediate relief. The sources, however, said identifying beneficiaries would be a long drawn-out task.
The government has already breached the fiscal deficit target in the current financial year that ends in March and has promised to return to the path of fiscal consolidation.
Sources said preliminary estimates have shown that the total fiscal stimulus package could be about 4% of GDP, almost the similar level that was unveiled during the 2008 financial crisis to provide a boost to the economy.
The government resorted to the Fiscal Responsibility and Budget Management Act (FRBM) to take a 0.5% deviation in the fiscal deficit for 2019-20 to provide a booster to counter the slowdown. The deficit has been pegged to 3.8% in 2019-20 and the Centre hopes to rein in at 3.5% of GDP in 2020-21.
The Covid-19 task force headed by FM Nirmala Sitharaman will hold extensive dialogue with various stakeholders, industry sectors and ministries and chalk out detailed steps to counter the economic challenges posed by the virus outbreak. Several sectors have seen a major impact.