SINGAPORE (ICIS)--India is taking steps to boost consumer and capital spending by about $10bn to shore up its coronavirus-hit economy, Finance minister Nirmala Sitharaman said on Monday.
The measures include advance payment of a part of the wages of federal government employees and allowing government employees to spend tax-exempt travel allowances on goods and services, Sitharaman said at a news briefing.
“All these measures are likely to create an additional demand of 730 billion rupees ($10bn),” Sitharaman said, as quoted by newswire Reuters.
The Indian government will shore up investment by spending extra rupee (Rs) 250bn on roads, ports and defense projects, and offering Rs120bn rupees in interest-free 50-year loans to state governments for spending on infrastructure before 31 March 2021, she said.
India, an emerging market giant in Asia, now has the second highest coronavirus cases in the world at above 7m, with additional 74,383 infections recorded on 11 October.
There are concerns that the south Asian country’s coronavirus cases would exceed those in the US in the next few weeks given rapid surge in infections in the past two months.
India's economy shrank by 23.9% in the April-June this year.
($1 = Rs73.35)
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