Covid fallout: No plan to print new banknotes, says Indian finance minister

India has no plan to print new banknotes to tide over the economic fallout triggered by Covid-19, Finance Minister Nirmala Sitharaman told the parliament today.

To a question on whether there is any plan to print currency to tide over the crisis, the Finance Minister said, "no, Sir."

Her answer came against the backdrop of suggestions by many economists and experts that the government should consider printing more currency notes to support the economy and protect jobs, reports our New Delhi correspondent.

India's real GDP is estimated to have contracted by 7.3 percent during 2020-21, Sitharaman said in a written reply in the Lok Sabha.

"This contraction reflects the unparalleled effect of the pandemic and the containment measures that were taken to control the pandemic," she said.

"The fundamentals of the economy remain strong as gradual scaling back of lockdowns, along with the astute support of self-reliant Bharat Mission has placed the economy firmly on the path of recovery from the second half of FY 2020-21," she said.

Sitharaman also added that the government announced a special comprehensive package of Rs 29.87 lakh crore to combat the impacts of the pandemic, revive economic growth, and bolster employment during 2020-21.

The Indian budget for 2021-22 had announced several measures to support broad-based and inclusive economic development, including a 34.5 percent increase in capital expenditure and 137 percent increase in health expenditure, she said adding that the government announced a relief package of Rs 6.29 lakh crore in June 2021, to strengthen public health and provide the impetus for growth and employment measures.

The budget 2021-22 estimates India's nominal GDP growth at 14.4 percent during the current financial year ending March 2022.

The Reserve Bank of India, in its latest Monetary Policy Committee (MPC) resolution of June 4, 2021, has projected India's real GDP to grow at 9.5 percent in 2021-22, after accounting for the impact of the second wave as compared to its earlier projection of 10.5 percent, she said.