Yesterday, PM Modi announced that the next economic package, along with the previous decisions by the RBI and the Finance Ministry will be a grand total of Rs 20 lakh crore, about 10% of India’s GDP.
Just to be clear about how massive the amount is, 20 lakh crore has 13 zeroes. That’s a lot of zeroes.
This combined package is among the biggest in the world after the financial packages announced by the US, which is 13% of its GDP, and by Japan, which is over 21% of its GDP.
At $266 billion, the amount is higher than the GDP of 149 countries such as Vietnam, Portugal, Greece, New Zealand and Romania. It almost equals Pakistan’s annual GDP of $284 billion.
To put that into perspective, India’s defence budget for the entire year in 2019 was a little above Rs 4 lakh crore. According to the HRD Minister Prakash Javadekar, India spends about 4.6% of its entire budget on education.
Sadly, you will be shocked to know as I was while researching for the purpose of this article, that India spends just 1.15% of its GDP on healthcare.
The central government will be spending more than twice of Jeff Bezos’ entire wealth to deal with the crisis. It is also more than 3 times what Bill Gates is worth and nearly 5 times what Mukesh Ambani is worth.
Earlier last month, Congress had cited an RTI to allege that the government had waived loans worth Rs 6.66 lakh crore of defaulters from 2014 till September 2019.
The amount the government will be spending on this package is more than thrice the amount!
Mind you, a large part of it (about Rs 8.04 lakh crore), is additional liquidity injected into the system by the RBI through various measures in February, March and April, Indian Express has reported.
Add to that Rs 1.7 lakh crore fiscal package announced by Finance Minister Nirmala Sitharaman on the 27th of March earlier this year and the economic package actually stands at Rs 10.26 lakh crore.
We will learn more about the actual contents of the package at Finance Minister Nirmala Sitharaman’s press conference later today.