Addressing the nation a day after he held detailed deliberations with chief ministers and days before Lockdown 3 ends, the PM said the mega package would be announced over the coming days by finance minister Nirmala Sitharaman even as he strongly identified the theme of “atmanirbhar Bharat (self-reliant India)” that he said wouldn’t be a self-absorbed vision but would rather make the country a part of global supply chains — seen as part of the overall strategy to attract foreign companies planning to shift from China.
Modi said the package, which includes measures already announced by the Reserve Bank of India (RBI) and the finance ministry, would be equal to 10% of the country’s gross domestic product (GDP). The RBI had announced support equal to 3.2% of GDP and the Garib Kalyan Yojana unveiled by Sitharaman on March 26 accounted for 0.8% of GDP.
Full text: PM Modi’s address to nation on Covid-19
The PM’s speech included a promise that new reforms wouldn’t ignore migrant labour and those whose livelihoods had been hit hard by Covid-19 and a call to be “vocal for local” .
There was a specific reference to “redi walas and thela walas (street vendors)”, part of the flow of migrants leaving cities in droves in the face of the pandemic’s economic impact, along with references to cottage industry, MSME, middle class, industries and other sectors.
Economy doesn’t need incremental steps but a quantum jump: PM Modi
Outlining the need for bold steps, the PM said the economy did not need incremental steps but a quantum jump and added this was one of the “five pillars” of a self-reliant India. The others are infrastructure, a tech-driven system that delivers on the dreams of a modern India, demography that is vibrant and demand that is fed by supply chains capable of meeting the needs of a growing nation. He added that this includeed a rational tax system.
Aware that the unprecedented lockdown had hurt people’s earnings,Modi sought to buoy spirits by saying though the threat was unparalleled, there was no room for tiredness, being defeated or dispersing in the face of the disease. He said no goal was impossible and India had the means and will to set targets and meet them.
Highlighting their contribution to the country and the suffering they have had experienced, Modi said the package would also focus on empowering the poor, labourers, migrants and others from both organised and unorganised sectors.
To put the overall package in context, the government had announced a package equivalent to 4% of GDP during the global financial crisis in 2008-09. The Rs 20 lakh crore package compares with Germany’s 10.7% of GDP and more than the 9.7% of GDP package unveiled by France to tackle the impact of Covid-19 on their economies. Several experts had called for a big stimulus which the government seems to have accepted except that it will be split into several components.
Modi underlined the importance of strengthening all stakeholders in the supply chain to increase, as well as fulfil, demand and made a strong pitch for local manufacturing and local products. He said the crisis had taught the country of the importance of local manufacturing, local market and local supply chains. “All our demands during the crisis were met ‘locally’. Now, it’s time to be vocal about local products and help these local products become global,” Modi said as he called for a self-reliant India.
The PM said self-reliance would prepare India for tough competition in the global supply chain, and it was important that the country won this competition. He said the same theme had been kept in mind while preparing the package. “It will not only increase efficiency in various sectors but also ensure quality,” he added.
Modi said the definition of self-reliance had undergone a change in the globalised world and clarified that when the country talked about self-reliance, it was different from being self-centred. He said India’s culture considered the world as one family, and progress in India was part of, and also contributed to, progress in the whole world. He said the world trusted that India had a lot to contribute towards development of the entire humanity.
In Video:PM Modi announces special financial package of 20 lakh crore to rebuild India