The second economic package is yet to be finalized. It is expected that the status of each sector will be clarified after the large-scale concessions in Lock down from this month onwards. There is also the expectation that the immediate announcement will stimulate the market.
Problem with Currency Printing
The lockdown had to be announced when the central government was in financial straits. The market has almost completely stalled most of the government’s revenue sectors. The freight service tax (GST) income may improve once the lockdown is withdrawn. But there is potential for a fall in income tax returns.
There has been criticism that the printing of note would affect the image of the government and lead to inflation. However, there are those who argue that purchasing power will not increase immediately and hence there is no need for inflation.
Assistance to States
There is no indication that the States are expected to receive direct financial assistance from the Center. The GST compensation arrears stood at Rs 60,000 crore as on December 31, March. This amount is not immediately distributed.
Reducing interest rate for those who do not have repayment of loans is considered as a way to help small and medium sized enterprises.