As per the report, the government is of the view that budget constraints should not come in the way of a stimulus to contain the impact of the pandemic on the economy with some experts estimating a contraction in growth during the current fiscal. Several ratings agencies such as Barclays Bank, Nomura and S&P Global Ratings have sharply cut their forecasts for India's 2020-21 GDP growth.
The sharpest cut came from the International Monetary Fund, which lowered its forecast for India's GDP growth by 390 basis points to 1.9%. However, no final decision has been taken on formulating a separate COVID-19 budget as of now, the report quoted sources as saying. The development comes amid departments adding a new account head for spending incurred on tackling COVID-19 and the effects of the lockdown. Such spending is being prioritised after the finance ministry announced expenditure curbs elsewhere, the report said.