Ahead of Diwali, Union Finance Minister Nirmala Sitharaman announced 12 economic stimulus measures, the third tranche of Atma Nirbhar Bharat. She said the stimulus – Atma Nirbhar Bharat 3.0 – amounts to Rs 2.65 lakh crore. If one were to add all the economic measures announced by the finance minister and RBI, it would amount to Rs 29.87 lakh crore, which is 15 per cent of national GDP. Sitharaman said, of this, stimulus worth nine per cent of GDP has been provided by the government.
Here are the highlights of the of 12 measures Sitharaman announced in presence of senior ministry officials.
Atma Nirbhar Bharat Rozgar Yojana
This new scheme incentivises job creation during pandemic. Under this scheme, if EPFO-registered establishments take in new employees without EPFO registration or those who lost jobs earlier, the government will provide subsidy.
The subsidy to be provided by the central government for two years in respect of new eligible employees engaged after October 1 will include employee’s contributions (12 per cent of wages) and employer’s contributions (12 per cent of wages) totalling 24 per cent of wages. In case of establishments employing more than 1,000 employees, the government will provide employee’s EPF contributions (12 per cent of EPF wages). The scheme will be operational till June 30, 2021.
Emergency Credit Line Guarantee Scheme for MSMEs, businesses, MUDRA borrowers and individuals (loans for business purposes), has been extended till March 31, 2021.
Sitharaman said credit guarantee support scheme ECLGS 2.0 is being launched for healthcare sector and 26 stressed sectors with credit outstanding of above Rs 50 crore and up to Rs 500 crore as on February 29, stressed due to COVID-19. These 26 sectors have been identified by the Kamath panel. Entities will get additional credit up to 20 per cent of outstanding credit with a tenor of five years, including one-year moratorium on principal repayment. This scheme will be available till March 31, 2021.
Production Linked Incentive worth Rs 1.46 lakh crore to 10 champion sectors
The FM said 10 more champion sectors will be covered under the Production Linked Incentives Scheme to help boost competitiveness of domestic manufacturing. This will give a big boost to economy, investment, exports and job creation. A total amount of nearly Rs 1.5 lakh crore has been earmarked across sectors, for next five years.
Rs 18,000 crore additional outlay for PM Awaas Yojana - Urban
Sitharaman announced Rs 18,000 crore was being provided for PMAY - Urban over and above Rs 8,000 crore already allocated this year. This will help around 12 lakh houses and complete 18 lakh houses, create additional 78 lakh jobs and improve production and sale of steel and cement, resulting in multiplier effect on economy.
Support for construction & infrastructure – relaxation of earnest deposit money & performance security on government tenders
“To provide ease of doing business and relief to contractors whose money otherwise remains locked up, performance security on contracts has been reduced from 5-10 per cent to 3 per cent,” the minister said.
Income Tax relief for developers and home buyers
In another measure, differential between circle rate and agreement value in real estate income tax under Section 43 CA of IT Act has been increased from 10 per cent to 20 per cent. This is for primary sale of residential units up to Rs 2 crore till June 30, 2021). Consequential relief up to 20 per cent shall also be allowed to buyers of these units.
Platform for infra debt financing
Government will make Rs 6,000 crore equity investment in debt platform of National Investment and Infrastructure Fund (NIIF), which will help NIIF provide a debt of ₹ 1.1 Lakh Crore for infrastructure projects by 2025.
Support for agriculture: ₹65,000 crore for subsidised fertilisers
As fertiliser consumption is going up significantly, ₹65,000 crore is being provided to ensure increased supply of fertilizers to farmers to enable timely availability of fertilisers in the upcoming crop season.
Boost for rural employment
Additional outlay of ₹10,000 crore is being provided for PM Garib Kalyan Rozgar Yojana to provide rural employment. This will help accelerate rural economy.
Boost for project exports
Rs 3,000 crore boost is being provided to EXIM Bank for promoting project exports under Indian Development and Economic Assistance Scheme (IDEAS Scheme). This will help EXIM Bank facilitate Lines of Credit development assistance activities and promote exports from India.
Capital and industrial stimulus
Rs 10,200 Crore additional budget stimulus is being provided for capital and industrial expenditure on domestic defence equipment, industrial infrastructure and green energy.
R&D grant for COVID-19 vaccine
Sitharaman said Rs 900 crore is being provided to Department of Biotechnology for research and development of Indian COVID-19 vaccine.
