PM Narendra Modi ‘s Rs 21lakh crore stimulus package has drawn more criticism,this time from global wealth manager

P.M. Narendra Modi ’s Rs 21 lakh crore stimulus package drawn more criticism, this time from the global wealth manager, Credit Suisse. Credit Suisse Wealth Management told that the govt’s stimulus package lacks major near-term support for the economy and may not be adequate to restore India’s growth trajectory, news agency PTI reported. The stimulus package announced by PM Modi on May 12, was further elaborated by Finance Minister ‘Nirmala Sitharaman’ in five-tranches, where she outlined the package that was carved out to help the Indian economy beat the slump caused by the corona virus pandemic situation.
Jitendra Gohil, Head of the Credit Suisse Wealth Management that is India Equity Research, said in the report – “India’s response to the COVID-19 crisis lacks major or innovative near-term fiscal support, and fails to provide the much-needed impetus to stimulate growth and kick-start economic growth,” . Narendra Modi  Credit Suisse told the actual fiscal spending that the Indian government will do is around Rs 2 lakh crore, translating to just 1% of the gross domestic product, indicating that the government is taking the fiscal caution for dealing with the pandemic situation. India’s stimulus package includes the monetary measures taken by the Reserve Bank of India.

Narendra Modi
Research and rating firms are already expecting a sharp slump in India’s GDP growth owing to the lockdown that has kept Indians indoors since the last week of March. “With no nominal GDP growth, India’s already high debt to GDP ratio (expected to cross 80% in the current fiscal) – a key metric for rating agencies could increase further and reach to levels that might be of concern for India’s credit rating,” as Gohil said. PM Narendra Modi and his government have taken the corona virus crisis time and are trying to steer the crisis into an opportunity, aiming for structural reforms, many of which were a part of the stimulus package announced last week.
If the growth doesn’t recover within the next number of quarters, the country’s macro-fundamentals could be in danger of significant deterioration, Gohil said. Credit Suisse remains defensive on Indian equities with a preference for sectors connected to agriculture, telecoms, info technology, and certain consumer and utility stocks from a three-six month perspective. Gohil said that Indian equity markets might expertise deterioration in investor sentiment. He expects flows from foreign portfolio investors (FPIs) and domestic investors to possibly abate within the close to term due to the prospects of reduced income levels and corporate profits.

 

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