Finance Minister Nirmala Sitharaman has called the meeting of the Financial Stability and Development Council (FSDC) on Thursday, which among other things will discuss the impact of COVID-19 on the financial sector and the economy.
This will be the first meeting of the FSDC, which comprises RBI Governor and other financial sector regulators, after the outbreak of the coronavirus.
The FSDC meeting, to be chaired by the finance minister, will held via video conferencing, sources said.
The meeting will take place in the backdrop of India staring at the risk of contraction in growth during the fiscal due to the COVID-19 crisis .
Besides the RBI Governor, the members of the FSDC include chairmen of the Securities and Exchange Board of India, Insurance Regulatory and Development Authority of India and Pension Fund Regulatory and Development Authority.
The senior officials of the finance ministry will also attend the meeting.
The council is expected to review various aspects associated with the mega Rs 21 lakh crore stimulus package announced by the government to help the nation tide over the economic crisis induced by the coronavirus and subsequent lockdown to curb its spread.
Earlier this month, the government announced a staggering Rs 20.97 lakh crore economic package, which includes Reserve Bank’s Rs 8.01 lakh crore worth of liquidity measures.
Sitharaman had announced this economic package in five tranches, which included a Rs 3.70 lakh crore support for MSMEs, Rs 75,000 crore for NBFCs and Rs 90,000 crore for power distribution companies, free foodgrains to migrant workers, increased allocation for MGNREGS, tax relief to certain sections and Rs 15,000 crore allocated to the healthcare sector to deal with the pandemic.
According to sources, various measures announced by the Reserve Bank of India since February and its impact on boosting economy and sentiment will also be deliberated during the FSDC meeting.
The RBI last week said the impact of COVID-19 is more severe than anticipated and the GDP growth during 2020-21 is likely to remain in the negative territory. It projected some pick-up in growth impulses from second half (October-March) of 2020-21 onwards.
