Page 433 - ES 2020-21_Volume-1-2 [28-01-21]

60 Economic Survey 2020-21 Volume 2

It may be emphasized that in contrast with the fiscal policy approach adopted by some of the other
countries, whereby a one-time large demand stimulus package was announced, the fiscal stimulus by
the Government of India was introduced in a phased manner. The special economic and comprehensive
package announced in the initial phase of lockdown focused on measures to primarily provide a
cushion to the vulnerable sections of the society and the small businesses. This included direct food
transfers to the poor and vulnerable, livelihood programmes, guarantees and liquidity enhancing
measures. Subsequently, along with the steady unwinding of the lockdown and restrictions, the
demand side impetus was given to re-inflate consumption demand. When the economic recovery
began after the lifting up of the lockdown, the focus of the stimulus measures shifted towards on
investment boosting measures like Production Linked Incentives, enhancing capital expenditure and
steps to encourage investment in infrastructure sector. This change in mix of the stimulus measures, as
shown in the figure below, reflects that the fiscal policy had the flexibility of adapting to an evolving
situation in order to enable a resilient recovery.

Figure 6: Mix of stimulus measures announced in response to COVID-19

March 2020 (` 1,92,800 crore) May - June 2020 (` 11,85,561 crore)

Revenue Health Demand boosting
forgone 8% 6%
4%
Agriculture (credit/
infra)- 30%

Liquidity support to
firms- 37%

Poor (Food/
livelihood)
88% Other Liquidity
measures- 15%
Food/livelihood-
12%

October 2020 (` 73,000 crore) November 2020 (` 2,65,080 crore)

Liquidity
measures Livelihood…
3%

Consumption Agriculture
boosting 25%
49% Health
Investment 0.3%
boosting
51% Housing sector
Investment 7%
boosting
59%