Finance Ministry Suspends New Schemes Due To Poor Economic Health Amid Ongoing COVID-19 Pandemic
Report By: Nandika Chand | Last Update June 6, 2020
The Finance Ministry, due to India’s poor economic health and the ongoing COVID-19 pandemic, has put new schemes and projects on hold.
Schemes approved under the Budget will also stay suspended till March 31, 2021. The ministry said schemes and projects which had been sanctioned and announced under the Atmanirbhar Bharat Abhiyan and other special packages will continue.
An official statement said initiation of new schemes already appraised/approved will remain suspended for one year till March 31, 2021. This announcement comes after the Center declared Rs20 lakh crore financial stimulus package to put more money into people’s hands as well as to push spending.
Shaktikanta Das, the governor of RBI, on 22 May had said the pandemic will likely lead to a negative growth in the fiscal year ending in March 2021. The country’s economic growth slipped to 3.1 per cent in the January – March quarter of 2019-20 showing impact of COVID-19 pandemic. In 2019-20, the Indian economy grew by 4.2 per cent against 6.1 per cent expansion in 2018-19.
Moreover, Moody’s – a rating agency forecasted no growth for India in financial year 2021 and a bounce back to a 6.6 per cent GDP growth in FY22. It said COVID-19 in India has significantly reduced the prospects of a durable fiscal consolidation. Moody’s noted that a prolonged financial stress among rural households, weak job creation, credit crunch among non-bank financial institutions increased the probability of a more entrenched weakening.
India’s nationawide COVID-19 lockdown, which has been described as one of the world’s most stringent, tried to contain the spread of COVID-19. But in turn it negatively impacted households and the country’s economy like other nations have witnessed.