Indian government unveils $60 billion credit line to support small businessesMay 15, 2020 14:22
(Image source from: indiatvnews.com)
Following the announcement of the economic package of INR 20 lakh crore, the one thing that the small business owners and self employed individuals have been worrying about is their place in the society.
With businesses running low and impacted economic growth, it has affected the small businesses the worst.
The Indian government has announced $60 billion of loan guarantees for the small businesses, shadow banks and the power companies to combat the economic damage inflicted on the country because of the pandemic.
This credit line is part of the 20 trillion rupee fiscal and monetary package that was announced by PM Narendra Modi on Tuesday during his address to the nation.
Finance Minister Nirmala Sitharaman has clarified to the reporters that the government has plans of helping 4.5 million businesses by October with credit guarantees that would help them access the collateral free loans from the banks.
“We have a responsibility toward the poor, the needy, the migrants and the disabled,” said Sitharaman in a press conference.
Aside from that, the Finance Minister also said that the government is going to provide 900 billion rupees to the power distribution companies that are run via the state run power finance companies.
Even the real-estate companies will be able to claim relief from the regulatory penalties for up to six months as the completion of the projects have been further delayed because of the Covid-19 outbreak.
Some of the industry leaders have been extensively supportive of all the steps taken by the government, especially the Finance Minister stating that the measures taken by the finance minister has been very well targeted and meet not just the short term and immediate but also the long terms goals.
Sitharaman has further clarified that the funding and the package would be partly sponsored with the additional government borrowing that has already been announced.
Further, Sitharaman declined to disclose the impacts it would further have on the fiscal deficit of the country. According to some of the reports from the private economists, they have reported that the same could widen over to 5% of the country’s GDP.
PM Modi has priorly clarified that the announced economical package is 10% of the country’s GDP and is aimed to help the affected business and the individuals who have been out of work because of the impacts of prolonged lockdown in the country.
Further outline of the package will be provided by the finance minister in the week to come, especially before the announcement by the PM on whether the lockdown is going to be extended or not post May 17.
India has reported over 82,000 cases along with over 2,600 deaths reported due to Covid-19.
By Somapika Dutta