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Covid-19 bailout package: Centre might need RBI's help to finance fiscal deficit

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The FRBM Act provides for an escape clause of 0.5% of GDP, which the government had exercised in the Budget for 2020-21 for additional borrowing from the market New Delhi: The Union government may require the Reserve Bank of India’s help to finance its fiscal deficit when it announces a bailout package for the stressed sectors of the economy reeling under the impact of the Covid-19 outbreak.

Restrictive measures on travel, including the 21-day nationwide lockdown, have brought the economy to a standstill, with aviation, hospitality and tourism sectors suffering a severe blow.

This has forced the government to contemplate a bailout package to prevent job losses and insolvency for some sectors. “The government can float additional security

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