Indian Prime Minister Modi Ignites Economic Revival... Announces 325 Trillion Won Stimulus Package

[Image source=EPA Yonhap News]

[Asia Economy Reporter Jeong Hyunjin] Indian Prime Minister Narendra Modi has announced an economic stimulus package worth 20 trillion rupees (approximately 325 trillion won), equivalent to about 10% of India's Gross Domestic Product (GDP), to mitigate the economic impact caused by the novel coronavirus disease (COVID-19). Although the number of new COVID-19 cases in India is on the rise, Prime Minister Modi is focusing on reviving the economy while preparing to gradually ease lockdown measures.

According to The Times of India and Bloomberg News on the 12th (local time), Modi revealed this stimulus package during a nationally televised address, calling it "an important step towards India's self-reliance." While he did not specify the exact measures of the stimulus, Modi explained that capital would be concentrated on land, labor, liquidity injection, and establishing a legal framework.

India, the world's second most populous country, implemented strict lockdown measures starting March 25 to curb the spread of COVID-19, which were extended for two weeks on the 3rd. During the lockdown, schools, transportation services, and commercial and industrial facilities were all closed, and residents' outings and inter-state travel were strictly restricted. The current lockdown is set to end on the 17th. Modi hinted at easing some lockdown restrictions after the 18th during a video conference with state chief ministers the day before.

On the same day, India reported 70,756 new COVID-19 cases, pushing the cumulative total beyond 70,000. The number of new cases increased by 3,604 compared to the previous day. There were also 87 additional deaths, bringing the total to 2,293. Currently, COVID-19 infections in India are concentrated in major cities such as Mumbai, New Delhi, Ahmedabad, and Chennai.

The reason Modi is focusing on economic stimulus despite the ongoing rise in COVID-19 cases is the increasing likelihood of an economic recession this year. Although some restrictions on manufacturing and self-employed workers were eased last week, 122 million people in India lost their jobs in April, and consumer demand declined. The International Monetary Fund (IMF) projects India's GDP growth rate for this year at 2.0%. However, Bloomberg reported that there remains a possibility of the first annual economic contraction in 40 years due to the COVID-19 situation.

This content was produced with the assistance of AI translation services.