A sharp sell-off in the fag-end of the session engulfed markets on Tuesday as incidents of localised lockdowns increased in the country. The economically important state of Maharashtra tightened Covid-19-related curbs, allowing shops to stay open only between 7 AM and 11 AM, while eastern state of Jharkhand announced a complete lockdown for a week, starting Wednesday. Uttar Pradesh government has also announced weekend lockdown across the state.
Given that India is grappling with a stronger second wave of Covid-19, Sameer Narang, chief economist at Bank of Baroda, believes that the government needs to announce a fresh stimulus package, tailor made for people and businesses impacted the most. He suggests that states can announce incentives for MSME investments to build supply chains under the Centre's PLI scheme. In addition to this, he says, RBI window of restructuring for MSMEs can be extended.