FM Nirmala Sitharaman announcements: Finance Minister Nirmala Sitharaman on Thursday announced as many as 12 new measures under the new Aatmanirbhar Bharat 3.0 stimulus package worth Rs 2.65 lakh crore to boost the Indian economy amid the ongoing COVID-19 pandemic.
She initially began by speaking about the current state of the economy. Energy consumption grew 12 per cent year-on-year in October, the finance minister said adding that, bank credit growth is up 5.1 per cent and stock markets are at a record high.
RBI predicting a strong likelihood of economy returning to positive growth in Q3, the minister said. She also added that global ratings agency Moody’s has reassessed the country’s growth numbers.
The finance minister’s announcements came a day after the Cabinet approved the Production-Linked Incentive (PLI) scheme for 10 sectors including advance chemistry cell batteries, electronic and technology products, automobiles and auto components manufacturing, among others. The PLI scheme for these ten sectors will be operational for five years with a total estimated outlay of Rs 1.46 lakh crore.
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Speaking about Aatmanirbhar Bharat 1.0, Sitharaman said that 28 states/union territories (UTs) have been brought under the national portability of ration cards with effect from September 1. 26.2 lakh loan applications were received under the PM SVANidhi scheme for street vendors, she said.
The minister said that credit boost has been given to 2.5 crore farmers through Kisan Credit Cards and Rs 1.4 lakh crore has been distributed to farmers. Separately, proposals from 21 states for Pradhan Mantri Matsya Sampada Yojana worth Rs 1,700 crore has been sanctioned.
She said that under the Emergency Credit Liquidity Guarantee Scheme, an amount of Rs 2.05 lakh crore has been sanctioned to 61 lakh borrowers, out of which Rs 1.52 lakh crore has been disbursed. Rs 1.18 lakh crore has been sanctioned to discoms of 17 states/UTs, the minister announced.
Key announcements made under Aatmanirbhar Bharat 3.0:
1. Aatmanirbhar Bharat Rozgar Yojana which will incentivise the creation of new jobs. The new employees hired by EPFO-registered organisations will get benefits during the COVID-19 pandemic.
The Atmanirbhar Bharat Rozgar Yojana will come into effect from October 1 and EPFO registered establishments – if they take in new employees or those who lost jobs earlier – these employees stand to get some benefits. If new employees are recruited from October 1, 2020, to June 30, 2021, the establishments will be covered for the next two years.
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2. Emergency Credit Line Guarantee Scheme (ECLGS) for MSMEs, businesses, MUDRA borrowers and individuals (loans for business purposes), has been extended till March 31, 2021, Sitharaman announced.
Entities in 26 stressed sectors identified by Kamath Committee plus healthcare sector with outstanding credit of above Rs 50 crore and up to Rs 500 crore will be covered under this.
3. Production Linked Incentive (PLI) scheme worth Rs 1.46 lakh crore is being offered to 10 sectors, the minister said adding that this will help boost the competitiveness of domestic manufacturing. A total amount of nearly Rs 1.5 lakh crore has been earmarked across sectors, for the next five years.
4. An additional outlay of Rs 18,000 crore over budget estimate towards PM Awaaz Yojana Urban which will help ground 12 lakh houses and complete 18 lakh houses.
This will also create additional 78 lakh jobs and improve production and sale of steel and cement, resulting in a multiplier effect on the economy, the government informed.
5. Performance security on contracts in the construction/infrastructure sector will be reduced to 3 per cent vs 5-10 per cent. EMD will not be required for bid tenders and will be replaced by Bid Security Declaration. The relaxations will be applicable till December 31, 2021.
6. Tax relief for developers and home buyers for houses up to Rs 2 crore.
The differential between circle rate and agreement value in real estate income tax is being increased from 10 per cent to 20 per cent with effect from today till June 30, 2021, for primary sale of residential units up to Rs 2 crore.
7. Rs 6,000 crore equity infusion into the debt platform of the National Investment and Infrastructure Fund (NIIF), which will help the NIIF in raising Rs 1.1 lakh crore by 2025 for infrastructure projects financing.
8. Rs 65,000 crore fertilizer subsidy will be provided to the farmers.
9. Additional outlay of Rs 10,000 crore being provided for PM Garib Kalyan Rozgar Yojana in the ongoing financial year FY21, the finance minister said.
10. An additional Rs 3,000 crore which will be released to EXIM Bank for the project exports through IDEAS scheme.
11. Rs 10,200 crore additional budget stimulus will be provided for capital and industrial expenditure on defence equipment, industrial infrastructure and green energy.
12. Rs 900 crore R&D grant for vaccine development of COVID-19.
The total spending by the government towards Aatmanirbhar Bharat 3.0 is going to be Rs 2.65 lakh crore. With this, the total spending by the government on stimulus measures for the COVID-19 pandemic stands around 17.16 lakh crore, while the total stimulus by the government and RBI works out to Rs 29.87 lakh crore, which is 15 per cent of India’s GDP.
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