India’s federal government has taken a cautious approach in response to the social and economic impacts of the coronavirus crisis. The initial fiscal support provided was equivalent to just 0.8% of GDP – despite millions of workers losing their jobs since the lockdown has been put in place. More recently, Prime Minister Modi has promised a much larger economic stimulus package, although there seems to be limited direct grants or subsidies available. This stands in contrast to the much larger fiscal support packages being put in place by governments around the world.
Yet is ‘doing whatever it takes’ a realistic option in India? The crisis comes at a time when the economy was already weakening, and the government is unable to rely upon the central banks to refinance debts denominated in foreign currency. How then should the government steer a course between providing relief from the crisis and concerns for the stability of the macroeconomy?
ODI is hosting a series of events aimed at supporting policy makers, researchers and practitioners by sharing country lessons around different aspects of the policy response to the coronavirus.