Most of the stimulus package done, nothing substantial: Analysts

Only about 1 % of GDP or ₹1.9 lakh crore of relief measures remain to be announced by the Centre in the coming days as calculations show that most of the allocated amount which added up to 10 % of GDP has already been exhausted.

"We expect the government to announce the remaining ₹1.9 trillion of measures (1 %of GDP) over the next few days," Prachi Misha of Goldman Sachs wrote in a research.

Goldman Sachs noted that including the measures announced on Thusday, ₹8.4 trillion worth of relief measures have been announced during the last two days.

Taking into account the Phase 1 stimulus package of Rs 1.7 trillion announced in March, as well as the measures taken by the RBI to infuse liquidity into the system between February and April, which based on calculations amount to ₹ 8 trillion and are likely to be included in the ₹20 trillion figure, we expect the government to announce the remaining ₹ 1.9 trillion of measures (1 % of GDP) over the next few days, Goldman Sachs said.

Following up on Wednesday's announcement of ₹ 5.9 trillion relief measures, the Finance Minister on Thursday unveiled another round of details on the ₹ 20 trillion fiscal package, amounting to a total of ₹ 2.5 trillion or 1.2 % of GDP. The measures particularly focused on migrant workers, small farmers, street vendors, and small traders.

Brokerage firm, Jefferies said in a research that the fiscal package 2 has nothing substantial. The ₹ 3.2 trillion package announcement on Thursday was unexciting. The details for ₹ 16-18 trilion (8-9 %t of GDP) are now known and the net hit to the central government fiscal is 1 % of GDP.

Over the last week, G Sec yields have moved up by only 10 bps, implying that the market expects heavy RBI intervention. With the bulk of the fiscal announcements now behind, focus will likely shift to economic recovery indicators and lifting of the lockdown, which will be a gradual process.

The government announced 9 measures with focus on welfare measures for bottom-of-pyramid population. Most of these are extension of old schemes, Jefferies wrote.

Citi Research said in a note that liquidity windows might be inadequate to support economic recovery in then absence of demand stimulus.

The government and the RBI have now provided more than ₹ 13 trillion (6.5 % of GDP) in liquidity and credit support to various segments of the economy which will help avert major demand decline from defaults in vulnerable entities. However, given lower demand and income visibility, some of the better positioned borrowers might not avail the various liquidity facilities. Moreover, easy credit amid low structural demand could accentuate the NPA issues plaguing the financial system. It is essential for remaining stimulus measures to ensure that the supply side shock does not morph into a demand side shock.

Citi said the government has reiterated commitment towards labour codes to protect workers. The government would continue to work on the four labour codes (one bill passed and others under different stages of parliamentary process) that would facilitate protection and formalization of the labour force. Moreover, to support urban migrant workers, the government would improve the availability of affordable rental housing particularly for migrant workers through the PPP route.