FM Sitharaman's address comes a day after the government announced new production linked incentives under another Rs 2 lakh crore PLI scheme for 10 major manufacturing sectors.Finance Minister Nirmala Sitharaman LIVE: Finance Minister Nirmala Sitharaman today announced the long-awaited stimulus package ahead of Diwali. FM Sitharaman rolled out 12 stimulus measures to boost employment in the formal and informal economy, boost housing infrastructure, enhancing ease of doing business, extending the deadline for the Credit Line Guarantee Scheme, etc. The address comes a day after the government announced new production linked incentives under another Rs 2 lakh crore PLI scheme for 10 major manufacturing sectors. The government also concentrated on announcing some fresh projects, collaterally boosting employment in the country. Finance Minister today announced an additional outlay of Rs 18,000 crore for PMAYUrban, which will help ground 12 lakh houses and complete 18 lakh houses. The move will create additional 78 lakh jobs and improve production and sale of steel and cement, resulting in a multiplier effect on the economy, theMinister said. The government today announced stimulus packages worth Rs 2,65,080 crores. The overall cost of the packages announced till date stands at Rs 29,87,641, which is 15 per cent of GDP.
Highlights
The announcement by the Finance Minister has made Diwali truly cheerful for the Real Estate Industry. While the initiatives provided earlier had set the wheels moving and few state Governments had also reduced the stamp duty to give added benefits, the circle rates in cities like Mumbai were still creating a barrier for homebuyers to make the purchase. With this announcement of increasing the differential between the circle rates and agreement rates to 20% from 10%, the affordable residential housing segment is surely expected to witness an uptick and buyers can make an informed decision which will eventually help them to save their taxes. Additionally, FM’s impetus to the PMAY-U will help create housing demand in Tier II & III cities and employment in allied industries.-- Farshid Cooper, MD, Spenta Corporation
Some of the schemes were very targeted, like the amendment to the income tax act on the difference in the circle rate and agreement rate, and I am hopeful, this will bring an uptick in the purchase of a residential property. Overall, most of the package can be implemented quickly and the benefits will pass on to the industry and citizens fairly soon. -- Gaurav Taneja, Partner and National Leader, Government and Public Services, EY India
The package announced by the Finance ministry is holistic, timely and a welcome move. It continues with existing schemes which have had a positive impact on-ground, in fact widens their scope like the credit guarantee scheme. This will be particularly beneficial to the 28 stressed sectors which were identified earlier. In addition, it builds on the infrastructure, agriculture & rural development, housing and manufacturing themes from Atmanirbhar 2.0. -- Gaurav Taneja, Partner and National Leader, Government and Public Services, EY India
Today's move will surely accelerate the economic recovery. The new Aatmanibar Bharat Rozgar Yojana will incentivise companies to create job opportunities for the less fortunate and marginalised sections of our society. -- Arjun Ranga, Managing Director, Cycle Pure Agarbathi
The capital infusion of around Rs. 10,200 crores for specific sectors such as defence manufacturing, etc. is continuation of the steps to encourage domestic manufacturing. More than the Atma Nirbhar Bharat 1.0 & 2.0, the third package can be expected to have profound impact since the economic activity is steadily improving. -- Divakar Vijayasarathy, Founder & Managing Partner, DVS Advisors LLP
Infrastructure & real estate is a clear winner with many announcements such as equity infusion into the infrastructure fund, amendment in Income Tax Act for real estate sector, reduction in EMD & performance guarantee, etc. Some of the announcements are extensions of existing schemes; however, few new schemes such as the subsidy for both employee & employer contribution to EPF with a condition of additional recruitment, have been introduced. This would go a long way in reducing the cost of production viewed in toto with the PLI scheme and other announcements. -- Divakar Vijayasarathy, Founder & Managing Partner, DVS Advisors LLP
The PF subsidy under the Atmanirbhar Bharat Rozgar Yojana will augur well in helping the stressed sector (which is one of the largest employer) in controlling its cost. Further, the SWAMIH scheme has started to see real traction and with 135 projects already approved and many more in the pipeline, there is good news for both types of the homeowners - (i) looking to buy a new home now and (ii) one who have bought home in a stuck project
-- Piyush Bothra, co-founder & CFO Square Yards.
Today's stimulus package has focused well on the real estate sector which has significant multiplier impact on the economy due to its high employment generation capabilities. The increased outlay under PMAY (U) coupled with the increased gap vis-a-vis the circle rate of 20% would give significant boost to the real estate sales specially in the mid to low price brackets. - Piyush Bothra, co-founder & CFO Square Yards.
Finance Minister today announced an additional outlay of Rs 18,000 crore for PMAYUrban, which will help ground 12 lakh houses and complete 18 lakh houses. The move will create additional 78 lakh jobs and improve production and sale of steel and cement, resulting in multiplier effect on economy.
Rs 10,200 crore additional budget stimulus will be provided for capital and industrial expenditure on defence equipment, industrial infrastructure and green energy: FM Sitharaman
Once active Covid cases have substantially declined, rightly the focus now is more towards giving a kick start the economy to top gear. In September 2020, Kamath Committee appointed by RBI, had identified 26 sectors which were directly impacted by Covid, like power, construction, iron and steel, roads, real estate, wholesale trading, textiles, consumer durables, aviation, logistics, hotels, restaurants and tourism etc. Companies in those sectors, including health, with credit up to Rs 500 crore and categorised as SMA 0 (default less than 30 days) as on 29th Feb 2020, will be eligible for additional guaranteed credit which can be repaid over five years including one-year moratorium. - Hari Hara Mishra, Policy Analyst and Columnist
The government announced a stimulus package worth Rs 2,65,080 crores today. The overall cost of the packages announced till date stands at Rs 29,87,641.
The governmnet announced Rs 900 crore for research and development for Covid vaccine. The money will go to the department of biotechnology for research purposes.
The government today announced an additional outlay of Rs 10,200 crore for the domestic defence equipment manufacturer, industrial expenditure, green energy sector etc.
An additional outlay of Rs 10,000 crore is being provided for PM Garib Kalyan Rozgar Yojana. Funds can be used for MGNREGA or for Gram Sadak Yojana, will help accelerate rural economy: FM Sitharaman
The government announced Rs 3,000 crore to EXIM banks to extend lines of credit to boost exports.
To provide ease of doing business and relief to contractors whose money otherwise remains locked up, performance security on contracts will be reduced to 3%, said FM Sitharaman. EMD for tenders will be replaced by bid security self-declaration and the relaxations will be till December 31, 2021.
During lockdown, PM Garib Kalyan Rozgar Yojana helped migrant workers in 116 districts. Now, the government announced Rs 10,000 crore for boosting informal employment.
While farmers are reaping benefit of favourable monsoon, the government announced Rs 65,000 crore for fertilizer subsidy for adequate supply to farmers. - FM
The government today announced Rs 6,000 crore equity investment for debt platform for NIA. A total of Rs 1.1 lakh crore will be received under overall equity investments.
Support for Construction & Infrastructure-Performance security on contract to be reduced to 3% instead of 5%. Earnest Money Deposit will not be required for tenders and will be replaced by Bid Security Declaration. Relaxations will be given till 31st December 2021: FM Sitharaman
The differential between circle rate and agreement rate is now increased from 10% to 20%. Government said that the move will help the middle class while buying houses.
We are launching credit guarantee support scheme for healthcare sector and 26 sectors stressed due to #COVID19, says FM. Entities will get additional credit up to 20% of outstanding credit, repayment can be done in five years' time (1 year moratorium + 4 years repayment)
Rs 18,000 crore announced to build 12 lakh more houses and completing 18 lakh houses, creating additional jobs and consuming more steel and cement.
More than 95% of all establishments and 65% of all employees in formal sector are estimated to be covered in first category, wherein EPF contributions will be given by govt. by way of subsidy support
The central government will give subsidy by way of EPF contributions for two years in respect of the new eligible employees. Subsidy will be credited upfront in Aadhaar-seeded EPFO accounts. - FM
Pradhan Mantri Rozgar Protsahan Yojana was implemented up to 31.03.2019. It had covered all sectors & is expected to run for 3 years. So even if someone joined the scheme on 31.03.2019, they would be covered under that existing scheme from then three years: FM Nirmala Sitharaman
If new employees of the requisite number are recruited from October 1, 2020 to June 30, 2021, the establishments will be covered for next two years - FM Sitharaman
Emergency Credit Line Scheme, which is a government guaranteed loan, has further been extended to 31 march 2021 - FM Sitharaman
New scheme Aatmanirbhar Bharat Rozgar Yojana being launched to incentivize job creation during the economic recovery. If EPFO registered establishments take in new employees or those who lost jobs earlier, these employees will get some benefits. The scheme will be effective from 1 October 2020 - FM
There are 12 announcements being made by Finance Minister Sitharaman today, as part of Aatmanirbhar Bharat 3.0 package.
Moody's today said it has raised its GDP forecast for India, prompting Finance Minister Nirmala Sitharaman to present it as a testament to India’s economic recovery. Moody’s Investor Service trimmed the estimate by which the economy is likely to contract.
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Atmanirbhar Bharat Rozgaar Yojana will aim to boost employment in the formal sector to generate more job opportunities.
FM announces Rojgaar Yojana to boost employment in the country.
Under Partial Credit Guarantee Scheme, Public Sector Banks have bought portfolios worth nearly Rs 27,000 crore. To infuse liquidity into discoms, loans worth Rs 1.18 lakh crore has been sanctioned, loans worth more than Rs 31,000 crore disbursed. - FM
11 states have already taken Rs 3,621 crores as interest-free loans, which is not inclusive of Bihar's expenditure. An additional amount of around Rs 450 crore will be included.
FM Sitharaman said that she is happy to say that Rs 25,000 crore has been distributed to help farmers prepare for Rabi sowing, this is over and above the budget allocation.
Under Emergency Credit Liquidity Guarantee Scheme, a total 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. - FM
Progress happening in all the measures announced so far - FM Sitharaman