India’s $22.6 billion Coronavirus financial action plan pales in comparison to the rest of world

India announces $22 billion financial relief package for citizensBI India

India finally joined the slew of countries around the world offering financial assistance amidst the debilitation effect of Coronavirus on people and economies. The Pradhan Mantri Garib Kalyaan Yojana (PMGKY) will dole out ₹1.7 lakh crore ($22.6 billion) to help vulnerable sections of society during the lockdown.

“We’ve come up with a package which will immediately take care of the welfare concerns of the poor and the suffering workers, and those who need immediate help,” said Finance Minister Nirmala Sitharaman during the press conference.

Around the world, countries collectively pledged $5 trillion to fight the Coronavirus pandemic.



India’s financial crisis
Earlier today, the US senate approved a plan to provide a $2 trillion stimulus, which includes giving individuals in the lower and middle income groups a $1,200 cheque each. This is the third stimulus package announced by the US government.

While the US has more resources than India, it also has a fraction of its population. It means India has little to distribute amongst its 1.3 billion people. The Coronavirus rescue plan provides extra food grain for three months per household. It also give a ₹50 lakh insurance cover to medical workers

Sitharaman also announced relief for MNREGA workers, poor widows, poor pensioners, women with Jan Dhan accounts, organised workers, and construction workers — who are bearing the brunt of the Coronavirus crisis.

Here’s how other countries around the world are allocation their financial aid:
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China

China

A medical worker from south China's Hainan Province rests by the window at the Wuhan pulmonary hospital on March 19 (Source: IANS)

According to official government figures, roughly 5 million people in China lost their jobs. The pandemic may have cost China as much as $196 billion because of the sudden halt in business activity.

Former International Monetary Fund (IMF) deputy managing director, Zhu Min, estimates that the tourism industry and consumer spending are the worst hit.

During the 2008 financial crisis, China had pumped $575 billion to keep its economy afloat — but it led to a huge amount of debt. To keep history from repeating itself, China hasn’t announced a fiscal stimulus programme, according to a group of government advisors

.

European Union

European Union

EU flag (Source: Unsplash)

The European Central Bank (ECB) rolled out a $820 billion emergency fund to ease the financial pressure on its member countries. Dubbed the Pandemic Emergency Purchase Programme, the apex bank will buy government and company bonds across the continent — including the troubled markets of Italy and Greece.

Christine Lagarde, ECB chief, tweeted that “there are no limits” to the bank’s commitment to the Euro.

The European Union Commission announced its own $43 billion Corona Investment Fund to help businesses, healthcare systems and other stressed sectors.

The commission also added that the existing EU investment fund will guarantee $9.3 billion in loans to 100,000 small and medium enterprises (SMEs). Businesses who are struggling to meet loan settlements will also be allowed to delay their payment.

US

US

Drive through Covid-19 testing facility in Arlington, Virginia (Source: IANS)

The US Federal Reserve was quick on the draw when it cut interest rates to zero and launched a $700 billion stimulus programme to bail the US economy.

In February, the Trump administration also kicked things off by injecting around $8 billion into efforts to fight Covid-19. Now, it’s trying to get a $1 trillion Coronavirus stimulus package approved by Congress.

If approved, it could include $50 billion to the airline industry and addition aid for other sectors. More importantly, it could mean sending immediate payments to millions of Americans to the tune of $1,000 each.

​Germany

​Germany

German Chancellor Angela Merkel delivering a video speech addressing the concerns around coronavirus (Source: IANS)

Germany’s central bank, the KfW, is prepared to lend $610 billion to companies to keep jobs safe. The aim of the fund is to protect the livelihood of workers, since many companies are impacted by self-isolation policies.

It’s a milestone for the country since this is one of the biggest economic aid packages since the second world war, according to France 24

UK

UK

European Parliament Liason Office in London (Source: IANS)

Tensions in the UK were already high as the country’s long-drawn out exit from the European Union is yet to reach its conclusion. As the Coronavirus pandemic made things worse, Chancellor Rishi Sunak announced a $403 billion lifeline for the economy.

He also promised that if the stimulus package wasn’t enough, he is willing to go further and provide as much capacity as is needed.

​Spain

​Spain

Only a few cars roam the streets of Barcelona amid coronavirus scare (Source: IANS)

Spain’s stock market, IBEX 35, lost 40% of its value in less than a month. To battle the health crisis, which snowballed into a financial crisis, the country announced a $220 billion stimulus package on March 17.

“We are not going to leave anyone behind. The state is going to take the economic shock,” said Spain’s Prime Minister Pedro Sanchez. The package is nearly one-fifth of the country’s GDP.

​Japan

​Japan

Pedestrains wearing masks walk by the olympic rings in Tokyo (Source: IANS)

Initially, the Bank of Japan (BOJ) eased the monetary policy to allow more risky asset purchases. The central bank plans to buy ETFs worth $113 billion over the course of the year. The government also unveiled a $4 billion aid package to support SMEs.

However, as the crisis worses, the government is now putting together a package to help the economy from turning on its head. One of the demands is tax cuts and a spending package of around $280 billion.

​Canada

​Canada

The city of Toronto shuts down major city servies amid coronavirus pandemic (Source: IANS)

America’s northern neighbor, Canada closed off its borders and is discouraging all non-essential travel. To rein in the impact, Prime Minister Justin Truedeau announced $27 billion in the form of direct financial assistance and $55 billion to cover tax deferrals — culminating into $82 billion package.

The package is worth 3% of the country’s economy. Officials are assuring citizens that if the current situation prevails, there’s more help to come.

France

France

Face mask lies discarded on the streets of Paris as coronavirus cases rise to 7,730 on March 17 (Source: IANS)

Even though France falls under the umbrella of the EU, it has announced its own stimulus package to deal with the impact of the coronavirus outbeak on its economy.

To help the many businesses who have had to suspend their economic activities during the pandemic, French Finance Minister Bruno Le Maire announced a $51 billion stimulus package to help the 3.5 million businesses that are bearing the impact.

​South Korea

​South Korea

Medical workers transfer patient to a hospital in Seoul, capital of South Korea (Source: IANS)

When the crisis was only beginning to unfold, South Korea announced $240,000 worth of loans for the airline sector. As things continued to escalate, the government rolled out a $9.8 billion stimulus package on March 4 to cushion the drop in tax revenue and help businesses in trouble.

With nothing turning the economy around, President Moon Jae-in announced a whopping $39 billion for emergency financing. The stimulus package includes relaxing loan terms, lowers interest rates and extending more capital.

​Qatar

​Qatar

Migrant workers in Doha (Source: Wikipedia)

Qatar is one of the worst affected countries in the Gulf Cooperation Council (GCC). The government announced a $23 billion economic stimulus, which includes $2.75 billion of government funds that will increase their investment in the stock exchange.

The package also includes putting mechanisms in place that will encourage banks to postpone payment on loans with a grace period of six months.

Australia

Australia

The Australian Capital Territory (ACT) has declared a public health state of emergency amid the ongoing coronavirus crisis
(Source:
Chu Chen/Xinhua/IANS)

Australia’s federal government announced a $17.6 billion financial stimulus package on March 13 to keep the economy from plunging into a downward spiral. The multi-billion dollar fund has been deemed the “safety net” package.

In addition to economic measures, Australia also announced $2.4 billion in the form of a health package to manage the crisis. It includes setting up 100 new pop-up clinics and $30 million for awareness campaigns.

Individual states within the country — excluding Victoria and the Australia Capital Territory — have also initiated funds to counter the pandemic. North Territory, for instance, announced a $60 million stimulus package to upgrade businesses so that they’re equipped to work from home and home renovations. All the states combined have pledged a total of $4 billion.

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