Govt defends move to combine fiscal, monetary measures in stimulus package

The government on Friday defended its decision to include Rs 6.5 lakh crore liquidity measures in its COVID-19 stimulus package, saying most countries have combined fiscal and monetary initiatives to deal with the crisis.

Many analysts and political leaders have expressed dismay over inclusion of monetary interventions in the stimulus package.

Explaining this, Expenditure Secretary T V Somanathan said unfortunately the argument is not correct and the fact is that packages announced by most countries are a combination of actual fiscal outgo and liquidity provisions.

For example, he said, "One country that gave out what is called a 15 per cent (of GDP) package which a lot of people talk about. Please look at it, 14.9 per cent of it was liquidity. So, it is not as if only one part of a package is counted."