Govt open to further stimulus package: DEA Secy
October 21, 2020 19:52
The government is open to further stimulus measures to boost the coronavirus-hit economy, Economic Affairs Secretary Tarun Bajaj said on Wednesday.
Finance Minister Nirmala Sitharaman had announced a slew of measures to spur demand and ramp up capital expenditure earlier this month.
This was the third stimulus package since the outbreak of the COVID-19 pandemic.
The government had announced a Rs 1.70 lakh crore Pradhan Mantri Garib Kalyan Yojana in March to protect the poor and vulnerable sections from the impact of COVID-19 crisis.
It was followed by the Aatmanirbhar Bharat Abhiyan package of Rs 20.97 lakh crore in May, largely focussed on supply side measures and long-term reforms.
"So I think with all these efforts and as I said, as the finance minister said, we are seeing what all other things can be done (to boost economy)," Bajaj said while addressing a virtual event organised by CII.
Earlier this week, Sitharaman had said the option for another stimulus package has not been closed.
"I have not closed the option for another stimulus package if it comes out to be, because every time we announced one, it has been after a lot of consideration of inputs which have come from various sections of society.
"Then we sit and work it out within the ministry and Prime Minister's Office and then take a final call. So, I have not closed the option to come up with one more stimulus," Sitharaman had said.
Speaking about the capital markets, Bajaj said the government has taken lot of measures to deepen the market.
Citing an example, he said "we have undertaken some reforms and it is an ongoing process. In the last Parliament session, the Bilateral Netting of Qualified Financial Contracts Bill was converted into an Act, after passage of both the houses and the President's assent was received."
As per estimates, it would result in capital saving of Rs 50,000-60,000 crore for banks alone in this whole process.
"I exhort the insurance companies and the regulators in that area to look at credit default swaps now that the netting bill has been passed. And if that happens, I think it should assist the bond markets as well," he said.
Bajaj also said Sebi and the finance ministry are in touch on the 'backstop facility'.
Sebi had earlier said it plans to set up a 'backstop entity' to buy illiquid investment-grade corporate bonds from mutual funds.
On direct listing of Indian companies on overseas exchanges, Bajaj said the Companies Act amendment bill passed by Parliament recently has provisions for this.
"The regulations and the other guidelines are in the process of reaching a finality. I have personally held very extensive discussions with the players in this area..I think this is also another step which was waiting to happen, which will give a fillip to some of our industries and some of our so-called unicorns a chance to actually pick up capital," he said. -- PTI
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