Liquidity woes faced by firms, challenges to the financial system in the wake of the Covid-19 outbreak and various relief measures under the Rs 21 lakh crore package, anounced by the government recently, are likely to feature prominently in the deliberations of a meeting of the Financial Stability and Development Council (FSDC) on Thursday. Finance minister Nirmala Sitharaman will chair the meeting.
The meeting comes at a time when the country is going through an unprecedented crisis that has ravaged the economy, hurt its financial system and dented the cash flow of businesses. The RBI has already forecast a contraction in FY21, while some analysts have warned of GDP shrinking by up to 5.2%.
On Tuesday, Crisil Ratings projected a 5% contraction in FY21 real GDP, warning that a ‘catch-up to the pre-crisis level of GDP growth will not be possible in the next three fiscals despite policy support”.
Apart from the finance minister and top officials of finance and corporate affairs ministries, financial-sector regulators — RBI governor Shaktikanta Das, Sebi chairman Ajay Tyagi, Irdai chief Subhash Chandra Khuntia and IBBI chairman MS Sahoo—would be present in the meeting.