The stimulus is necessary to support the vulnerable segments of the society and also to prevent additional structural damage to the economy amid the lockdown which has suddenly stopped the business activity, S&P said in a report.

In March, the government announced a ₹1.7 lakh crore relief package focusing on providing food security to the poor and providing money in their hands to fight COVID-19.

Many industry watchers have said the package was too less, while some have backed the Centre for not front-loading the package, saying the longevity of the pandemic is not known.

The quantum of a new stimulus package is a highly speculated aspect, with some industry watchers advocating caution and others pushing for more spending given the unprecedented nature of the pandemic.

“In our view, the Indian government is likely to introduce additional fiscal stimulus measures, which could be broader in scale relative to efforts so far," the agency, which has a 'BBB-/Stable/A-3' rating on the sovereign, said.

It added that apart from the direct fiscal transfers to the affected individuals, government officials have indicated a willingness to use a range of options available in their policy toolbox which may include additional support for the corporate and the financial sector as well.