The government is planning a stimulus package and direct, immediate relief for sectors such as hospitality and Medium, Small and Micro Enterprises (MSME), which are India’s biggest employers and have been battered by COVID-19, sources familiar with official deliberations said.
Discussions about the package are still at an early stage but this time, the government is unlikely to go for long-term policy announcements a source said.
Initial discussions suggest the stimulus package may have three elements.
First, Immediate relief to the most affected sectors such as hospitality, MSME, real estate and construction. Sources said the government think tank NITI Aayog is in favour of direct stimulus like wage support, easy credit and tax relief to mid-and small-size hoteliers.
The second element could be relaunching of some schemes that were implemented in the first wave of the pandemic. Aatm Nirbhar Bharat Rozgar Yojna may be relaunched with some changes. Under the scheme, establishments going for new hiring were given special EPF subsidy from the central government.
Emergency Credit Line Guarantee Scheme (ECLGS) for MSMEs may also be relaunched with some changes in conditions, according to sources. Under this scheme, MSMEs get loans without collaterals. Pradhan Mantri Gareeb Kalyan Yojna, under which 5 kg ration is being given free of cost, may be extended.
Third feature of the proposed relief package could be special focus on unorganised sector. The government may launch a dedicated portal to give direct support to labourers in the organized sector as and when necessary.
NITI Aayog and ministries of finance, commerce and industries are holding discussions with stakeholders for the proposed package, and trying to assess the loss incurred by the identified sectors in the second wave of COVID-19. Some announcements relating to the stimulus are expected when states start unwinding restrictions imposed during the second wave of the pandemic.