Wealthy countries like Germany and Italy have allocated fiscal stimulus, including bank guarantees, of more than 30% of their gross domestic product. India’s support so far adds up to less than 1% of its GDP. Economists like Soumya Kanti Ghosh of the State Bank of India and Sanjay Mathur of Australia & New Zealand Banking Group Ltd. estimate the government’s support should be as big as 8 trillion rupees. Part of the reason for the government’s lack of action is its limited fiscal room. Faced with a weakening economy before the virus outbreak, (Finance Minister Nirmala) Sitharaman widened the fiscal deficit target for this year to 3.5% of GDP. An increase in fiscal spending to fight the virus could increase the shortfall to about 8%, according to Citigroup.
'Calls for India Fiscal Aid Grow Louder as Businesses Struggle', BloombergQuint