TOKYO -- India will cover up to 20% of pay for newly employed workers as part of a 2.65 trillion rupee ($35.8 billion) stimulus package announced Thursday aimed at kick-starting an economy struggling to overcome the coronavirus pandemic.
The job program, announced by Finance Minister Nirmala Sitharaman, will cover jobs that pay up to about $200 per month, at small businesses that hire at least two new employees and larger companies that bring on at least five between last month and next June. The subsidy will last for two years.
With the country's economy projected to contract by a record 10% or so this fiscal year, new jobs are urgently needed to turn it around.
India had reported 8.7 million COVID-19 cases as of Thursday, with migrant workers and other low-income groups hit especially hard. Around 120 million jobs were lost in April alone, the worst month for employment.
Sitharaman announced a total of 12 measures in the country's third stimulus package since May, including tax relief for middle-class homebuyers, fertilizer subsidies for farmers and steps to boost exports. This follows two previous packages announced in May and October.
The government estimates the total impact of the three rounds of stimulus at 30 trillion rupees. But given the relatively low fiscal outlays so far, market watchers are skeptical.