The Modi government on Thursday announced another financial stimulus package, as a part of Atmanirbhar Bharat 3.0.
Finance Minister Nirmala Sitharamana announced 12 new measures under the new Atmanirbhar Bharat 3.0 stimulus package to boost the Indian economy amid the ongoing coronavirus pandemic. The measures announced by the centre are expected to be aimed at sectors worst hit by the pandemic and lockdown.
Before announcing the package, the Finance Minister spoke about the current state of the economy, in which she highlighted the growth in energy consumption in October and added that bank credit growth is up 5.1 per cent and stock markets are at a record high.
“RBI is predicting a strong likelihood of economy returning to positive growth in Q3”, the Finance Minister said. She also added that global rating agency Moody’s has reassessed the country’s growth numbers.
Speaking about Aatmanirbhar Bharat 1.0, the Finance Minister also said that 28 states/union territories (UTs) have been brought under the national portability of ration cards with effect from September 1. The minister added that at least 26.2 lakh loan applications were received under the PM SVANidhi scheme for street vendors.
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. She also pointed out hat proposals from 21 states for Pradhan Mantri Matsya Sampada Yojana worth Rs 1,700 crore has been sanctioned.
The announcement comes shortly after the Union Cabinet approved the Production-Linked Incentive (PLI) scheme for 10 sectors on November 11.
Here are the 12 measures announced by Finance Minister Nirmala Sitharaman on Thursday under Atmanirbhar Bharat package 3.0:
1. Atmanirbhar Bharat Rozgar Yojana
Finance minister Nirmala Sitharaman on Thursday announced the Atmanirbhar Bharat Rozgar Yojana to incentivise the creation of new employment opportunities. The new scheme will be in addition to Prime Minister Rozgar Protsahan Yojana.
The beneficiaries will include any new employee joining the EPFO registered establishment, who draws a monthly wage of less than Rs 15,000 who lost jobs during the pandemic and regained employment after October 1.
The scheme is being launched to incentivise the creation of new employment opportunities during the Covid-19 recovery phase. This will be effective from October 1, 2020, for the next two years.
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— PIB in Maharashtra 🇮🇳 (@PIBMumbai) November 12, 2020
Here are the criteria for EPFO registered establishments to be eligible for benefits under #AatmaNirbharBharatRozgarYojana
If new employees of requisite number are recruited from Oct 1, 2020 to June 30, 2021, the establishments will be covered for next two years pic.twitter.com/VpVpNnXizW
2. Existing Credit Guarantee Scheme extended till March 2021
Finance Minister Nirmala Sitharaman also announced that Rs 3 lakh crore existing emergency credit line guarantee scheme is extended till March 31, 2021. The guaranteed credit for supporting stressed sectors to be utilised for 100 per cent guaranteed collateral-free additional credit at capped interest rates.
The Finance Minister said that the tenure of additional credit to be 5 years, including one year moratorium on principal repayment.
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— PIB in Maharashtra 🇮🇳 (@PIBMumbai) November 12, 2020
We are launching credit guarantee support scheme for health care 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) pic.twitter.com/ABhCCjecDU
3. More sectors to be covered under Manufacturing PLI Scheme
Finance Minister Nirmala Sitharaman also announced a Rs 1.46 lakh crore boost for Atmanirbhar Manufacturing Production-linked incentive for 10 champion sectors. A total amount of nearly 1.5 lakh crore has been earmarked across sectors, for the next five years, she added.
The government has already approved a PLI scheme for 3 sectors at a cost of Rs 51,355 crore. The scheme is expected to give significant boost to economic growth and employment.
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— PIB in Maharashtra 🇮🇳 (@PIBMumbai) November 12, 2020
Here are the 10 champion sectors for which the government is launching Production Linked Incentive Scheme
A total amount of nearly 1.5 lakh crore has been earmarked across sectors, for next five yearshttps://t.co/9LpWkVzzaY pic.twitter.com/yR0iCZn8wM
4. Additional spending on PM Awas Yojana (Urban)
The Modi government announced an additional outlay of Rs 18,000 crore for Pradhan Mantri Awas Yojana (Urban), which will be provided over and above the budget estimate which was mentioned in the Budget 2020-21.
The decision will help ground 12 lakh houses and complete 18 lakh houses, said the Finance Minister announcing new measures under stimulus package.
“A number of measures have been taken in the past several months for the revival of the Housing and Real Estate Sector. These measures have contributed to the fair recovery in this sector,” said Sitharaman.
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— PIB in Maharashtra 🇮🇳 (@PIBMumbai) November 12, 2020
Finance Minister announces additional outlay of ₹ 18,000 crore for @PMAYUrban
Will help ground 12 lakh houses and complete 18 lakh houses
Will create additional 78 lakh jobs and improve production and sale of steel and cement, resulting in multiplier effect on economy pic.twitter.com/ghfyljMGDP
5. Support for construction and infrastructure
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%, the Modi government announced.
The Finance Minister said that the EMD for tenders will be replaced by bid security self-declaration for which the relaxations will be applicable till December 31, 2021.
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— PIB in Maharashtra 🇮🇳 (@PIBMumbai) November 12, 2020
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%
EMD for tenders will be replaced by bid security self-declaration
Relaxations till December 31, 2021
– @nsitharaman pic.twitter.com/RvlwmioovP
6. Income Tax relief for developers and home buyers
The Union government has announced tax relief for developers and home buyers for houses up to Rs 2 crore.
Under this, the Income-tax relief will be provided to 20% of the differential between circle rate and agreement value increased from the existing 10%. FM Sitharaman said that this would be applicable on primary sale of residential units of value up to Rs 2 crore.
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— PIB in Maharashtra 🇮🇳 (@PIBMumbai) November 12, 2020
Differential between circle rate and agreement value in real estate income tax is being increased from 10% to 20%
From today till June 30, 2021, for primary sale of residential units up to ₹ 2 crore
The income tax relief provides incentive to middle class to buy homes: FM pic.twitter.com/qJtNEsIFGl
7. Infusion of equity in National Investment and Infrastructure Fund
Finance Minister Nirmala Sitharaman said the government would make a 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.
She also announced that private equity participation to also come in the NIIF. NIIF has itself invested Rs 2,000 crore debt platform has a loan book of Rs 8,000 crore and deal pipeline of Rs 10,000 crore, the Finance Minister said in the press conference.
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— PIB in Maharashtra 🇮🇳 (@PIBMumbai) November 12, 2020
Govt. will make ₹ 6,000 crore equity investment in debt platform of National Investment and Infrastructure Fund, which will help NIIF raise ₹ 1.1 lakh crore by 2025 for financing infrastructure projects
– Finance Minister @nsitharaman pic.twitter.com/836Rwvllo1
8. Support of Rs 65,000 crore for subsidised fertilisers
The Modi government also announced that Rs 65,000 crore fertiliser subsidy will be provided to farmers. This will help 140 million farmers, said Finance Minister Nirmala Sitharaman.
Fertiliser consumption is going up significantly and increased supply of fertilisers at subsidised rates will ensure that forthcoming crop seasons will not be affected, the Finance Minister said.
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— PIB in Maharashtra 🇮🇳 (@PIBMumbai) November 12, 2020
₹ 65,000 crore fertilizer subsidy will be provided to farmers
Fertilizer consumption is going up significantly, increased supply of fertilizers will ensure that forthcoming crop seasons will not be affected for want of adequate fertilizers
– Finance Minister @nsitharaman pic.twitter.com/mU6HTU8Q4r
9. Additional outlay on PM Garib Kalyan Rozgar Yojana
An additional outlay of Rs 10,000 crore is being provided for PM Garib Kalyan Rozgar Yojana, announced Finance Minister Nirmala Sithataman.
The Modi government has allowed these funds to be used for MGNREGA or for Gram Sadak Yojana aiming at helping accelerate rural economy.
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— PIB in Maharashtra 🇮🇳 (@PIBMumbai) November 12, 2020
Additional outlay of ₹ 10,000 crore is being provided for #PMGaribKalyanRozgarYojana, announces Finance Minister @nsitharaman
Funds can be used for MGNREGA or for Gram Sadak Yojana, will help accelerate rural economy pic.twitter.com/l0kJXnKOMy
10. Boost for project exports
Finance Minister Nirmala Sitharaman also announced an additional Rs 3,000 crore that will be released to EXIM Bank for the project exports through IDEAS scheme.
About 811 export contracts amounting to $10.50 billion being financed under LoCs, the Finance Minister added.
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— PIB in Maharashtra 🇮🇳 (@PIBMumbai) November 12, 2020
₹ 3,000 crore boost to be given for project exports through assistance given by India to developing countries under IDEAS Scheme
This will help EXIM Bank facilitate these Line of Credit development assistance activities and promote exports from India
– FM @nsitharaman pic.twitter.com/0yia1LoQMD
11. Capital and Industrial stimulus
The Modi government has also allocated Rs 10,200 crore additionally to give impetus to capital and industrial expenditure.
The Finance Minister said that the amount will be spent towards domestic defence equipment, industrial incentives, industrial infrastructure, and green energy.
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— PIB in Maharashtra 🇮🇳 (@PIBMumbai) November 12, 2020
₹ 10,200 crore additional budget stimulus will be provided for capital and industrial expenditure on defence equipment, industrial infrastructure and green energy#AatmaNirbharBharat 3.0 pic.twitter.com/VIXJK2eQ20
12. R&D grant for Covid vaccine development
Finally, to fight the coronavirus pandemic, the centre has announced Rs 900 crore fund for Covid Suraksha Mission for Research and Development to the Department of Biotechnology.
The provision being made only towards research activity said FM Sitharaman. The actual cost of vaccine and logistics required for distributing the vaccine is different and will be provided., she clarified.
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— PIB in Maharashtra 🇮🇳 (@PIBMumbai) November 12, 2020
₹ 900 crore is being provided to @DBTIndia for research activities related to #COVID19 vaccine development
This does not include cost of vaccine or logistics for vaccine distribution (whatever is required for that will be provided)
– @nsitharaman#AatmaNirbharBharat 3.0 pic.twitter.com/tKuD4h6VIq
The five stimulus package announced by the Modi government have together provided a total fiscal stimulus of Rs 17.16 lakh crore since the COVID-19 pandemic began. In addition to this, the RBI has announced various measures worth Rs 12.71 lakh crore taking the total stimulus package close to Rs 30 lakh crore, amounting to 15 per cent of India’s gross domestic product (GDP).
Under Atmanirbhar Bharat 3.0, the fiscal stimulus is Rs 2.65 lakh crore, which includes the PLI scheme announced on November 11.
Atmanirbhar Package – the economic stimulus announced by Modi government
Earlier in May, in a series of announcements, the Modi government had announced economic stimulus to battle the economic downturn induced by the coronavirus outbreak.
The relief package announced by the government includes a host of measures such as free food grains for distraught migrant workers, hike in foreign direct investment in defence, liquidity measures for the MSMEs, changes in Essential Commodities Act, increase in public expenditure in health, among others.