Almost all infrastructure ministries continued spending on capex throughout the lockdown, even as the Centre tried to maintain some semblance of economic normalcy.

The sudden stop in economic activity led to a sharp decline in employment-intensive sectors like construction, manufacturing and trade, hotels, transport etc.

Instead, 2019-20 could be the base from which the Budget estimates for next year are calculated.

he government is examining a plan of bank recapitalisation and considering an urban version of MNREGS.

The thinking at the Centre is that since the RBI has ramped up purchases of government bonds, the interest earned on them will be transferred to the exchequer as dividend.

'We are not able to manufacture even low-end products as cheaply as China.' 'We are not buying Chinese goods today out of any love for China.'

So far, the RBI has been 'indirectly monetising' by increasing the purchases of G-Secs in the secondary market through open-market operations.

This includes an infrastructure push which may lead to the government spending more than its budgeted capital expenditure for 2020-21. There are also discussions on increasing the scope and quantum of direct cash transfers to the beneficiaries who need it the most.

'Given the 50 per cent or thereabouts increase in borrowing that has been announced, it is a reasonable estimate to say that at this time, an increase of 1.7-1.8 per cent on the 3.5 per cent budgeted fiscal deficit target is being anticipated,' Chief Economic Adviser Krishnamurthy Subramanian said on Friday.

'It is a package for a new self-reliant India.'

This comes at a time when the COVID-19 crisis is expected to derail the government's revenue maths for 2020-21, hitting the mop-up from sources such as taxes and divestment.

These conditions are implementation of the 'One Nation, One Ration Card' scheme, ease of doing business, power sector reforms, and urban local body reforms.

There could be multiple measures announced in quick succession, not only by the finance minister but also other ministers regarding their respective sectors, and by the Reserve Bank of India. The total size of these announcements could rival that of other G-20 nations as a percentage of GDP.

The finance minister is ready to present a second financial package. The Centre has ruled out a mega stimulus and will rely on targeted, incremental packages. Industry is clamouring for a bailout, the liquidity upheaval in capital markets is nowhere close to being sorted out, and all budgetary forecasts now stand irrelevant, reports Arup Roychoudhury.

The beneficiaries of the second set of announcements are expected to be micro, small, and medium enterprises, farmers, women, poor, migrant workers, and other marginalised sections of the society, reports Arup Roychoudhury.

This is because the bond market has factored in the Rs 4.88-trillion gross borrowing for April-September 2020.

The worst-case scenario is the two marquee names up for privatisation - Air India and Bharat Petroleum - may not happen this year, and what the Centre may get in divestment proceeds could just be a fraction of the target.

The downward surprise in Q2 stemmed from a stronger-than-anticipated drag from gross fixed capital formation and marginal weakness in private final consumption expenditure. In Q3, projection errors emanated mainly from a steep unanticipated contraction in gross fixed capital formation, which was the deepest in the new series of GDP.

This permission was given some time late last month, before the Reserve Bank of India (RBI) on March 31 issued the indicative borrowing calendar for the states for April-June and the one for the Centre for April-September.

To meet the revised estimates for 2019-20, the central government will have to garner Rs 5.03 trillion in total revenues in March, which has seen the worst phase of the coronavirus pandemic so far and the resultant lockdown.