Second India coronavirus stimulus to focus on aid to small business
NEW DELHI: A second stimulus package India is poised to announce in coming days will be worth around 1 trillion rupees ($13 billion) and focus on help for small and medium businesses weathering the coronavirus outbreak, two senior officials said on Wednesday.
“The second package could be focussed largely on MSMEs,” one of the senior government officials, with direct knowledge of the plan told Reuters, using an acronym for micro, small and medium enterprises.
The official said a separate package could be announced for bigger companies after assessing the extent of the hit they have faced due to the lockdown imposed to fight the outbreak.
Last month, India outlined a 1.7-trillion rupee ($22.6-billion) economic stimulus plan providing direct cash transfers and food security measures to give relief to millions of poor hit by the nationwide lockdown.
Indian media have been speculating that the government would soon announce more relief.
The new package aimed at MSMEs could include increases in the limits of bank loans for working capital needs, hiking threshold limits for availing tax exemptions and relaxing rules for deposits of income tax and other dues, the sources said.
A finance ministry spokesman declined to comment.
“The proposals to provide an immediate relief to small firms are being given final shape,” the second government source said, adding the government also planned to partially clear tax refunds owed to small businesses within one month, to provide some immediate relief.
Federal and state governments and state-owned companies owe more than $66 billion to small businesses, the government told parliament last month.
Small businesses account for nearly one-quarter of India’s $2.9 trillion economy and employ more than 500 million workers, according to government estimates.