NEW DELHI: While Prime Minister Narendra Modi is expected to announce extension of the lockdown, he is likely to adopt a holistic approach by relaxing restrictions in areas that are relatively free of Covid-19 infections.
According to sources, the Centre has lined up measures to kickstart the economy that has come to a standstill since the 21-day nationwide lockdown came into force on March 24. The plan is to let key industries open in a phased manner without allowing mass gathering of people. Indications are that the government is waiting for the fourth quarter results of India Inc to start coming in to gauge the extent of impact on companies, before announcing any big-bang relief package for big industries.
Meanwhile, minutes of the Reserve Bank of India’s Monetary Policy Committee (MPC) meeting released on Monday indicated that the extent of the dampening demand and productivity loss in the country can only be fathomed after the pandemic subsides.
In its three-day meeting that ended on March 27, the MPC had slashed repo rate by 75 bps to ensure that finance, the lifeline of the economy, keep flowing seamlessly to various sectors.
Sensing a protracted lockdown, the Indian Banks’ Association on Monday asked the Reserve Bank of India to extend the threemonth loan moratorium announced earlier this month to at least five months.
Last week State Bank of India chief Rajnish Kumar and chairman IBA had already hinted that the loan moratorium might be increased further in view of the gloomy economic scenario. Meanwhile, in what may be the first set of data showing the extent of damage the pandemic inflicted on the economy, automobile sales numbers for March showed passenger vehicle sales declined 51% to 143,014 units against 291,861 sold in the same month last year.
The decline is squarely attributed to Covid-19 as customers sought to stay away from showrooms amid the coronavirus outbreak. The prospects of global economy are equally grim. Though the world’s oil exporters have managed to hammer out a historic output cut deal over the weekend — ending the oil price war between OPEC and Russia — to prop up prices, the steep fall in demand could keep prices down.