PM Modi LIVE: Narendra Modi Says Total Virus-Related Economic Package Will Be Worth Rs 20 Lakh Crore

Prime Minister Narendra Modi said that in the coming days Finance Minister Nirmala Sitharaman will come out with a series of announcements for the revival of the Indian economy that will be aimed at making the country self-reliant.

Including the already announced Rs 1.7 lakh crore package and the numerous measures implemented by the Reserve Bank of India, the new set of announcements will give a collective boost of Rs 20 lakh crore to the Indian economy, Modi said.

These reforms will cover land, labour, liquidity and laws.

Modi also said details on the next phase of the lockdown will be given soon.

CII Co-Chairman Naushad Forbes said that the government should use the package to make direct cash transfers to those at the bottom of the economic pyramid.

Forbes added that the government should consider loan guarantees for enterprises. It should backstop the RBI and the RBI will guarantee the banks, he told BloombergQuint.

The large part of the upcoming package should go towards paying the bills to states, private and public enterprises and small businesses.

He said, in the short term, it is important to get the manufacturing engine of the country running.

• There's a lot of pent-up demand due to the lockdown.
• Demand will return if people are confident about their own earnings in the future.
• Don't think demand will return immediately for big-ticket items like cars.
• There will be a lag between reforms have an impact on the ground but such announcements can be a confidence booster.

Crisil's Dharmakirti Joshi said that he does not expect the government's reforms to pay off immediately.

They will increase the growth potential and in turn take care of the fiscal stress created by the stimulus, Joshi told BloombergQuint. Still, he said, it is the states who will continue to do the heavy lifting on land and labour reform.

"This does not look like a front-loaded fiscal package. Expect it to be spread over the course of the year."

• Golden opportunity to reform the agriculture sector; Centre will have to take the lead on that .
• Inefficiencies between the farm and fork can be addressed right now.
• Right now, the focus should be on ensuring people's survival.
• Don't think India has the resources to stimulate the economy right now.
• Part of the funding for the package will come from enhanced borrowings, rest will come from restructuring expenditure, monetising deficits etc.
• Expect details of the full stimulus package to be announced gradually.
• Will be a huge challenge to raise resources at this juncture; there are only a few options available.

Saurabh Mukherjea, Founder, Marcellus Investment Managers

“The size of the package is surprisingly large nobody expects this whilst we wait details what's intriguing is the theme of self-sufficient India. When the markets open tomorrow focus will be on the details of the package and specifically understanding what it means for manufacturing and within that electronics, electricals, auto ancillaries, medical equipment. Because if you think about self-sufficient India you think about India's biggest deficits which are in manufacturing, high tech manufacturing, defence manufacturing. So the sheer size of the package will be a positive surprise for the market tomorrow.”

Sudip Bandyopadhyay, Chairman, Inditrade Capital

“Total economic package at 10 percent of GDP is a bold move to support the ailing economy locked down to prevent the spread of Covid-19. Expect equity markets to take it positively in the near-term.”

Nilesh Shah, Managing Director and CEO, Envision Capital

“First, the world’s most stringent lockdown to save lives and now an unprecedented stimulus and structural reforms to revive the economy and make India globally competitive. This is India’s big leap towards revival, resurgence and economic development.”

Nilesh Shah, Managing Director, Kotak Mahindra Asset Management Company

“This is a big stimulus from a size point of view. Quality of spending, out-of-the-box thinking on financing, and flawless execution will change the orbit of the Indian economy. Markets will constantly evaluate those to determine the future course.”

Prime Minister Narendra Modi said that details on the next phase of the nationwide lockdown will be given to citizens before May 18.

The economic package being announced today will cover land, labour, liquidity and laws.

A self-reliant India will stand on 5 pillars

• Economy: that makes quantum jumps
• Infrastructure: the identity of a modern India
• System: a 21st-century technology-driven system
• Demography: a vibrant demography
• Demand: we must increase demand, improve supply chain

Prime Minister said that India has the best talent in the world and that its inherent strength.

“We can make the best products, technology and supply chain in the world. I remember the Kutch earthquake – there was destruction all around. But soon Kutch was able to revive itself. That is the Indian spirit and courage. If we decide we can achieve anything. Today there is the ambition and the resources to make India self reliant.”

Prime Minister said that the current crisis has only emphasised the need for India to be “self-reliant”.

Modi said that when the outbreak began there was not a single PPE kit being produced in India. But now, almost 2 lakh PPE kits are being produced daily. “We’ve only done this because we turned crisis in an opportunity.”

Humanity will have to stay resolved in the fight against coronavirus as getting lax and getting tired is not allowed.

The prime minister said that the world has been battling Covid-19 for over four months. It’s an unprecedented crisis which no one had seen or heard of before.

Prime Minister Narendra Modi is set to address the nation at 8 p.m. tonight, a day after meeting with state chief ministers to discuss the future course of the nationwide lockdown.

India has been reeling under lockdown since March 25. Initially, the lockdown was for three weeks. Since then, with the unabated rise in Covid-19 cases, the lockdown has been extended twice. It is scheduled to end on March 17.

The lockdown has had a widespread economic impact with multiple indicators falling to record-breaking lows in April. Millions of Indians were left stranded with little to no source of livelihood.

While some relaxations have been offered since the last week of April, they have not been enough to support the economy as implementation differs from state to state.

This was the fifth such video meet between Modi and the chief ministers. Some state leaders have asked Modi to give them the flexibility to plan an exit strategy from the lockdown. States want to designate areas as red, orange or green themselves instead of the Centre doing it for them.

The state governments also demanded that they be empowered to decide the conduct of economic activities within the state.

The road ahead should focus on reducing the spread of the virus and ensuring all precautions are taken by people, including social distancing norms, Modi told the chief ministers.