India’s Government reported that it will offer nearly USD 60 Billion of loan guarantees for small businesses to combat the economic damage caused by the COVID-19 pandemic. The credit line derives from the USD 266 Billion fiscal and monetary packaged reported by the Prime Minister Narendra Modi on Tuesday in efforts to support the economy that has taken damage due to the lockdown. Finance Minister Nirmala Sitharaman had told reporters that the government aims to help 4.5 million businesses by fall. Collateral-free loans from banks are imperative in aiding businesses survive the coronavirus pandemic. “We have a responsibility toward the poor, the needy, the migrants and the disabled,” Sitharaman said, in the first of several daily press conferences on the package.
The government will also provide USD 11.95 Billion to power distribution companies via state-run power finance companies. Real estate companies will be allowed to claim relief from regulatory penalties for up to six months when completion of projects is delayed due to the coronavirus.
“The measures announced by the finance minister are very well-targeted and meet the immediate as well as longer-term requirements,” top industry body the Confederation of Indian Industries (CII) said in a statement. Sitharaman said the package will be partially funded through government borrowing that was previously announced. She did not disclose the impact on India’s fiscal deficit.
On Monday, Modi reported that the package was equal to 10% of India’s gross domestic product. Details of the package will continue to rollout this week before Modi decides whether or not to extend India’s lockdown that is scheduled to run until May 17th.