As per the report, the government is of the view that budget constraints should not come in the way of a stimulus to contain the impact of the pandemic on the economy with some experts estimating a contraction in growth during the current fiscal. Several rating agencies such as Barclays Bank, Nomura and S&P Global Ratings have sharply cut their forecasts for India’s 2020-21 GDP growth.
Since the pandemic has become such a huge factor for policy influence worldwide it is likely that the government of India may come up a dedicated budget for a strong comeback plan from COVID-19. The biggest challenge of this house ahead of policymakers is about to ensure medical facilities and infrastructure available and ready as well as on the other hand work towards bringing economic life back on track.
The sharpest cut came from the International Monetary Fund, which lowered its forecast for India’s GDP growth by 390 basis points to 1.9%. However, no final decision has been taken on formulating a separate COVID-19 budget as of now, the report quoted sources as saying. The development comes amid departments adding a new account head for spending incurred on tackling COVID-19 and the effects of the lockdown. Such spending is being prioritised after the finance ministry announced expenditure curbs elsewhere, the report said.