May 20, 2020
Finance Minister Nirmala Sitharaman said that every sector will benefit from the recently-announced Rs 20 lakh crore stimulus package. “Somewhere every sector, even though I have not named each one, will be touched by what the banks are being able to extend without additional collateral,” she said on Wednesday.
In an interview to The Economic Times, the minister said that when the way they have given out the package covers or touches most sectors. She was replying to a question on how there is no specific intervention for more stressed sectors such as hospitality and airlines. “The way in which we have given out the package, when we deal with banks extending assistance to businesses, in our understanding it certainly covers or touches most sectors,” she said.
“This, of course, is on the assumption that nobody has put 100 per cent their money to start a business. It’s their money plus some kind of borrowing. So, in a way that formula, that I am not going to ask you to give more to get a little more assistance, is designed with everybody in mind. Therefore, sectors will benefit from what we are doing,” she told the daily.
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The minister also commented on experts’ opinion that the package was mostly meant to address the supply side even if there is no demand. She elaborated that to say that the package is only fuelling the supply side and not the demand side is not correct. “The money obviously is being spent for the initial starting exercise because it’s a restarting process. And, that is actually going to generate demand, that is actually going to put money in the hands of people who will in turn spend,” said Sitharaman adding that strictly supply-side measures also have a demand-side component. “And the ripple effect is something that will touch at the ground level, so many segments of society. So, strictly boxing it and saying it’s supply side and you have not done anything for the demand side is not right,” she added.
Sitharaman said that while the measures have been announced, she does not have a time frame on how soon they will aid the economic activity. “I don’t have a time frame, and the fact that I don’t have a time frame also influences my decision-making on my borrowing, on the stimulus, on the kind of money that I’m extending. I have to be prepared. And, God forbid, we don’t want anything. Not just this pandemic, any pandemic, ever touching India. We need to be prepared,” said the minister.