At 3.2% of GDP, how does India's Rs 5.4 lakh crore stimulus compare to other countries?

Updated : March 27, 2020 04:14 PM IST

India's total economic stimulus is lower compared to other countries.

But India is also less affected by the COVID-19 outbreak.

With several countries, including India, undergoing a severe lockdown to control the coronavirus pandemic, governments and central banks worldwide have had to take drastic measures to counter the economic side effects of such decisions.

The RBI today announced a series of steps, including a cut in rates as well as the reserve ratio, that puts its total monetary stimulus into the economy at around Rs 2.7 lakh crore (this figure includes other steps it has announced recently).

Combine this with the government's Rs 1.7 lakh crore fiscal package, it brings up the size of the total revival package at Rs 5.4 lakh crore. Or, considering India's Rs 170 lakh crore GDP, 3.2 percent of its output.

While RBI's measures were aimed at bringing down interest rates and making credit more easily available, FM Nirmala Sitharaman's economic relief was squarely aimed at millions of low-income households and the poor, by way of providing direct cash transfers and food security measures.

However, here's how India's stimulus package compares to other countries.

US: India's economic measures have come a day after the US Senate passed a massive $2 trillion bill aimed at helping unemployed workers and industries hurt by the coronavirus epidemic. With the US economy pegged at $20 trillion, this stimulus translates into a size of about 10 percent of GDP.
UK: Britain has reportedly rolled out a GBP 330 billion or a little over $384 billion package of loan guarantees. This translates to a size of about 14 percent of GDP, given the UK economy stands at about $2.8 trillion.
Germany: Angela Merkel’s government has agreed a stimulus package worth over EUR 750 billion or $810 billion to mitigate the impact of the coronavirus outbreak, with the government aiming to take on new debt for the first time since 2013. This translates to more than 20 percent of Germany's $3.86 trillion economy.
Canada has provided a $19 billion stimulus to directly support benefits and another $38.62 billion in liquidity to businesses through tax deferrals. In total, this comes up to about 5 percent of Canada's GDP.
Japan’s government is considering a fiscal stimulus package worth roughly 10 percent of the country’s nominal gross domestic product (GDP) to combat the economic impact of the coronavirus outbreak, according to a Nikkei report. The package, worth more than $503 billion, will include cash payouts to households, the paper said without citing sources.

It must, however, be noted that India is not yet as much affected by the coronavirus outbreak.

For instance, the US yesterday became the country with the highest number of COVID-19 cases, at more than 80,000.

India has so far recorded over 700 cases.

At 3.2% of GDP, how does India's Rs 5.4 lakh crore stimulus compare to other countries?

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