PM Modi to review state of economy with Finance Minister Nirmala Sitharaman today

Prime Minister Narendra Modi will review the state of the economy with finance minister Nirmala Sitharaman on Tuesday evening to identify possible policy action including the need for another stimulus to push up economic activity in the country.

Though the finance minister is not carrying a specified agenda for discussion with the PM, she is likely to present a picture of the state of the economy and impact on the ground and the progress made by various initiatives announced by the government to battle the COVID-19 disruptions.

After announcing the demand generating measures earlier this month, the finance minister had hinted at another stimulus package. This could cover those who have been left untouched from earlier schemes while providing more money into the schemes announced for SMEs.

‘... I have not closed the option to come up with one more stimulus,’ Sitharaman said recently at the virtual launch of the autobiography of 15th Finance Commission chairman NK Singh.

To deal with the Coronavirus crisis, the government in May had announced one of the world’s biggest stimulus packages worth Rs 20.97 lakh crore with a focus on the survival of the business and drawing a road map for the revival of the economy.

It also announced measures to provide more money in the hands of government and PSUs employees by reworking LTS rules earlier this month.

Coronavirus has given a severe blow to the country’s economy with GDP growth falling deep into the negative territory in the April-June quarter.

With government revenue falling and COVID-19 relief measures increasing expenditure, the country’s fiscal deficit is all set to breach the 8 per cent mark.

While the unlock of the economy has started giving positive outcomes with a lot of businesses returning or reaching closer to normal levels, it is still a long road ahead to full recovery.