For the last two years, the COVID-19 pandemic and subsequent lockdowns have been disrupting economic activity and impacting the country's growth. While the outbreak of the virus in 2020 pushed the country into a 'technical recession', the second wave of the pandemic derailed India's economic recovery. Consequently, the Centre had to announce a stimulus package to help the most affected sectors and those from financially weaker sections. The size of the stimulus measures in 2020 was close to Rs 30 trillion. In 2021, the size of the package announced after the second wave was around Rs 6.3 trillion.

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This time around, the Centre is closely monitoring the economic repercussions of the dramatic rise in COVID-19 cases, primarily due to the highly contagious Omicron variant.

According to a Livemint report, quoting unnamed sources, discussions are already taking place over the need to put in place an economic response if the third wave of the pandemic bleeds businesses.

The report says that as the finance ministry has entered the last leg of the Budget-making process, the government is weighing the need for measures outside of the Union Budget to deal with the possible economic disruptions due to the third wave of the pandemic. The idea is to be prepared with a strategy in case the pandemic causes more-than-expected disruptions to economic activity and livelihoods.

Meanwhile, it is also expected that the Budget will strengthen the government's capital expenditure plan in response to the need for stimulus following the third wave. The Centre had raised the capital expenditure to Rs 5.54 lakh crore in the last Budget from Rs 4.39 lakh crore in 2020-21. Besides, the states could be offered a 50-year loan programme or be allowed additional borrowing.

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(Edited by : Thomas Abraham)