NEW DELHI: The Centre's stimulus measures including announcements made on Monday may be a case of too little, too late. believe that the total fiscal stimulus from the government till date amounts to 1.5-2 per cent of the GDP, with the stimulus package for extra spending on infrastructure and demand generation valued at 0.2 per cent of GDP.
Compared with the fiscal stimulus, including payroll support, given by other nations, this is seen as "underwhelming". While the US has come up with a stimulus package worth 13.3 per cent of its GDP, nearer home, Australia has bankrolled one worth 10.8 per cent and Singapore a massive 20 per cent.
Nomura, describing India’s stimulus as "underwhelming", said that it views "the impact on both fiscal and growth as quite limited... small compared with the size of the growth hit, and reflects India’s weak fiscal starting position". Capital Economics, another research firm, believes that the total value of India’s fiscal stimulus adds up to 2 per cent of its GDP.
Said Prof Ravi S Srivastava, former chairman, Centre for Regional Studies, JNU, "We have long advocated far larger direct fiscal support to incomes. Delays in implementing a meaningful fiscal stimulus to prop up demand would mean recovery will take longer." The RBI has forecast a contraction of 9.5 per cent for the fiscal year, while the IMF believes it could be in the double digits.
Finance Ministry officials say they have been working on larger support programmes and aver the Centre may yet go in for them "this winter", but point out that India’s weak financial position has hamstrung bolder decisions. The Government had in May raised its borrowing target from a budgeted Rs 7.8 lakh crore to Rs 12 lakh crore to meet increased expenses from stimulus and healthcare programs and to take into account the reality of lower tax collections. Many now expect the fiscal deficit to widen further, even without another stimulus programme.