Modi Meets Ministers to Finalize Steps to Revive Indian Economy

(Bloomberg) -- Prime Minister Narendra Modi discussed ways to increase liquidity and credit to businesses, infrastructure and farming sectors to restart Asia's third-largest economy, which is reeling under the impact of the world's toughest lockdown.

In a meeting with senior ministers, including Home Minister Amit Shah and Finance Minister Nirmala Sitharaman, and other key government officials on May 2, Modi discussed strategies and interventions to support small businesses and farmers as the country prepares to allow some activity to revive the economy. Talks revolved around enhancing liquidity and strengthening credit flows for a quick recovery after the country was shut towards the end of March to check the spread of Covid-19, according to a statement posted on Twitter.

Prime Minister Modi announced a total lockdown on March 24, shutting all but essential goods and services. That halted manufacturing and wiped out consumption, the backbone of the economy which is heading for it first contraction in more than four decades. The government has extended the stay-at-home orders for another two weeks from May 4 but eased restrictions in some areas to restart economic activity.

Revival of the infrastructure sector and speedier implementation of construction projects that involve large scale employment were examined, the statement added. The government is considering a proposal to guarantee as much as 3 trillion rupees ($40 billion) of loans to small businesses, people familiar with the matter said last month.

India's central bank Governor Shaktikanta Das met chief executive officers of the nation's banks on May 2 to discuss ways to ensure credit flow to businesses once the lockdown order ends.