With Moody’s improving the overall projection of the Indian economy, the Indian finance ministry now seems to be rather confident and motivated to put the economy back on track.
Thumping its chest on the economic figures of October, union minister Nirmala Sitaraman yesterday announced a series of economic measures as part of the already continuing endeavor of Atmanirbhar Bharat under the name of Atmanirbhar Bharat package 3.
The total stimulus package after the announcement of the 3rd package, including the policy initiatives in the last 2 packages announced, worth ₹ 1,102,650 crores and ₹ 73,000 crores respectively, have together constitute around Rs 29.8 lakh crore.
It is an intensive package with a series of schemes and reforms announced creating a heavy buzz. Some of the highlights of the package are:
- New Aatmanirbhar Bharat Rozgar Yojana is announced to incentivize the creation of new employment during the COVID-19 recovery phase as part of the Modi government’s second stimulus package. If EPFO-registered establishments take in new employees without EPFO registration or those who lost jobs earlier, the Yojana will benefit these employees.
- The Emergency Credit Line Guarantee Scheme for MSMEs, businesses, MUDRA borrowers, and individuals (loans for business purposes) has been extended till March 31, 2021.
- A credit guarantee support scheme ECLGS 2.0 is being launched for the healthcare sector and 26 stressed sectors with credit outstanding of above Rs 50 crore and up to Rs 500 crore as on Feb 29 2020 stressed due to COVID-19.
- 10 stressed sectors will be eligible for production linked incentive, to boost competitiveness in domestic manufacturing. A total amount of around 1.5 lakh crores is allocated for the next 5 years. The ten sectors include Advance Cell Chemistry Battery, Electronic/Technology Products, Automobiles & Auto Components, Pharmaceuticals Drugs, Telecom & Networking Products, Textile Products, Food Products, High-Efficiency Solar PV Modules, White Goods (ACs & LED), and Specialty Steel.
- A sum of Rs 18000 crore is being given to Pradhan Mantri Awas Yojana- Urban. This expectedly will help in 12 Lakh houses and complete 18 Lakh houses, moreover creating 78 Lakh jobs and incentivizing production and sale of steel and cement, resulting in a multiplier effect on the economy.
- To provide ease of doing business and relief to contractors in Construction and Infrastructure. performance security on contracts is reduced from 5-10% to 3%. It will further extend to currently in motion contracts and Public Sector Enterprises.
- The Centre committed to making a Rs 6,000 Crore equity investment in the debt platform of National Investment and Infrastructure Fund (NIIF), which will incentivize NIIF provide a debt of Rs 1.1 Lakh Crore for infrastructure projects by 2025 creating a Platform for infra debt financing
- EXIM banks are backed by a Rs 3,000 Crore package to provide a boost for promoting project exports under Indian Development and Economic Assistance Scheme (IDEAS Scheme).
- The Centre has provided Rs 900 Crore to the Department of Biotechnology for Research and Development of Indian COVID Vaccine.
These are some of the highlights of the package. Overall, we can safely conclude that the package will be going to give a significant boost to the already strongly recovering economy as the union minister herself said that this package is expected to incentivize the economy with around 15% of GDP, which in itself will be a great leap forward if things will proceed as per plan.