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FM Nirmala Sitharaman Press Conference Highlights
Finance Minister Nirmala Sitharaman began her press conference at 1 pm on Thursday at the National Media Center in New Delhi, the minister's office informed in a tweet.
All eyes are set on the press conference as the country awaits announcements on a much-needed fresh round of stimulus to aid growth in the economy.
The package would follow Wednesday's announcement of production-linked incentives (PLI) worth Rs 1.46 lakh crore over five years for manufacturers in 10 sectors.
Total Stimulus measures announced till date
FM Sitharaman ended the press briefing, stating the summary of stimulus measures announced towards economic recovery amid COVID-19 crisis. So far, the central government has announced Rs 1,92,800 crore towards PM Garib Kalyan Package (in March), Rs 11,02,650 crore for Atmanirbhar Bharat Abhiyaan 1.0 (May), Rs 82,911 crore for PMGKP Anna Yojana extension, Rs 73,000 crore in Atmanirbhar Bharat Abhiyaan 2.0 (12 October) and Rs 2,65,080 crore for ABA 3.0 (today). Further, RBI measures towards COVID-19 account to Rs 12,71,200 till 31 October. FM further said that the total stimulus announced so far accounts for 15% of GDP. Of this, the government's stimulus accounts for 9% of the GDP.
R&D grant for COVID-19 vaccine
Rs 900 crore will be provided for COVID Suraksha Mission for Research and Development of Indian COVID-19 vaccine to the Department of Bio-technology.
Capital and Industrial Stimulus
FM Sitharaman said that Rs 10,200 additional budget outlay will be provided for Capital and Industrial expenditure related to 1)Domestic defence equipment 2)Industrial incentives 3)Industrial infrastructure 4) Green energy
Measures to boost exports
FM Sitharaman announced Rs 3,000 crore to be released to EXIM bank to provide support to export projects through Lines of Credit (LOC) under IDEAS Scheme.
Rs 10,000 crore for PM Garib Kalyan Rozgar Yojana
The central government will provide an additional outlay of Rs 10,000 crore towards PM Garib Kalyan Rozgar Yojana in the current financial year to accelerate the growth of rural economy.
Rs 65,000 crore for subsidised fertilizers
The central government will provide Rs 65,000 crore to ensure that adequate amount of fertilisers are provided to farmers in a timely manner in the upcoming crop season. The increased supply of fertilisers at subsidised rates will help 140 million farmers, FM Sitharaman said.
Rs 6,000 crore equity infusion in NIIF debt platform
NIIF AIFL and IFL will raise Rs 95,000 crore debt from the market, including project bonds. While NIIF has already invested nearly Rs 2,000 crore in equity in the platform, the government will invest Rs 6,000 crore as equity and the rest will be raised from private investors.
Income Tax relief to developers and home buyers
The differential between circle rate and agreement value has been increased from 10% too 20% (under sec 43CA) till 30 June 2021 for only primary sale of residential units of value up to Rs 2 crore. This will help developers clear unsold inventory. Consequential relief of up to 20% will be allowed to buyers of these units under sec 56(2)(x) of the IT Act till June 2021.
Relaxation of EMD & Performance Security on Govt Tenders to support Construction & Infrastructure
To support Construction & Infrastructure, FM announced that performance security on contracts will be reduced to 3% instead of 5 to 10% for ongoing government contracts which are free of disputes. It will also be extended to Public Sector Enterprises. Further, Earnest Money Deposit (EMD) will not be required for tenders and replaced by Bid Security Declaration. These relaxation will be given till 21 Dec 2021.
Rs 18,000 crore For PMAY-Urban
FM said that as part of the government's efforts to revive demand in real estate sector, Rs 18,000 crore will be provided over the Budget Estimate for 2020-21 for PM Awas Yojana-Urban through additional allocation and Extra Budgetary Resources. This will be above the Rs 8,000 crore already announced this year.
ECGLS 2.0
The scheme will have no upper ceiling on annual turnover and will receive an additional credit of up to 20% of the outstanding as on 29 February. Tenure of the scheme will be 5 years, including 1-year moratorium on principal repayment. The scheme will be available till 31 March 2021.
ECGLS 2.0 Launched
The Emergency Credit Line Guarantee Scheme was reintroduced by FM for 26 stressed sectors identified by the Kamath Committee plus the health care sector. Entities with credit outstanding of above Rs 50 crore and up to Rs 500 crore on 29 February 2020, will be eligible.
Emergency Credit Line Guarantee Scheme Extended
The Emergency Credit Line Guarantee Scheme (ECLGS) announced in May, has been extended till 31 March 2021.
Govt to provide subsidy for Rozgar Yojana
The central government will provide subsidy for 2 years in respect of new eligible employees engaged on or after 1 October 2020. This will be limited to 12% of the EPF wages in case on establishments with over 1,000 employees. The subsidy support will be credited upfront in Aadhaar seeded EPFO accounts (UAN) of eligible new employees.
FM Announces Atmanirbhar Bharat Rojgar Yojana
FM announced a new PM Rozgar Protsahan Yojana that will be effective from 1 October 2020 for 2 years, to incentivize formalisation and creation of new employment. EPF members drawing monthly wages of less than Rs 15,000 who made exit from employment during the Covid 19 pandemic from 1 March 2020 to 30 September 2020 and are employed after Oct 1, 2020, would be eligible. Establishments that are registered with EPFO can add new employees under the scheme, with certain conditions. Establishments registered with EPFO after the commencement of the scheme will get subsidy for all new employees. Scheme will be operational till June 2021.
Atmanirbhar Bharat 2.0 Progress
FM recalled the announcements made on 12 October, regarding festive advance (SBI Utsave Cards), LTC voucher scheme, additional capital of Rs 25,000 crore to MoRTH and Ministry of Defence, as well as interest free loans to states, as part of the central government's efforts to provide support to the economy.
Liquidity injection for Discoms
Loans worth Rs 118.273 crore have been sanctioned to 17 states/UTs and Rs 31,136 crore has been disbursed/released to 11 states/UTs.
Banks, NBFC, HFCs
Public sector banks have approved purchase of Rs 26,889 crore under the Partial Credit Guarantee scheme. Rs 7,227 crore has been disbursed as part of the Special Liquidity Scheme for NBFC/HFC.
ECLGS 1.0 progress
Rs 2.05 lakh has been sanctioned to 61 lakh borrows under the ECLGS. Out of this, Rs 1.52 lakh crore has been disbursed.
PM Matsya Sampada Yojana proposals sanctioned for 21 states
Rs 1,681.32 crore has been sanctioned towards proposals for 21 states for PMMSY, the FM said.
2.5 crore farmers provided credit through Kisan Credit Cards
Credit boost has been given to 2.5 crore farmers through Kisan Credit Cards. 183.14 lakh applications were received. Rs 25,000 crore has been disbursed out if the additional emergency working capital funding through NABARD, FM said.
28 states/UT bought under One Nation-One Ration Card
The inter-state portability now covers 68.6 crore beneficiaries who can get their food grains from any state or UT.
FM provides progress updates on Atmanirbhar Bharat 1.0 announcements
Calling the stimulus announcements made in March and May as "Atmanirbhar Bharat 1.0" FM Sitharaman provided an update on progress so far.
Economy making strong recovery: FM
FM Sitharaman said that a decline in active COVID-19 cases from over 10 lakh to 4.89 lakh active cases, positive composite PMI data for October, increased energy consumption, higher GST collection, improved bank credit and higher FDI inflows, are all pointing at a strong recovery in the Indian economy.
FM Sitharaman begins press conference
Finance Minister Sitharaman provided an update on the economy, says the government will announce a few measures related to the stimulus.
Sensex, Nifty Decline Ahead of FM Sitharaman's Press Conference
At the start of the afternoon session, benchmark indices continue to trade with losses. Nifty 50 was down 0.6% at 12,674 and Sensex down 0.7% at 43,292. Meanwhile, broader market indexes outperformed with Nifty Midcap index up 0.4% and Nifty Smallcap index trading higher by 1.1%.
PLI Scheme for 10 sectors
On Wednesday, the Union Cabinet gave its approval to introduce the Production-Linked Incentive (PLI) Scheme for 10 key sectors to "Enhancing India’s Manufacturing Capabilities and Enhancing Exports" as part of the government's Atmanirbhar Bharat mission. The 10 sectors chosen were: Advance Chemistry Cell (ACC) Battery, Electronic/Technology Products, Automobiles & Auto Components, Pharmaceuticals drugs, Telecom & Networking Products, Textile Products: MMF segment and technical textiles, Food Products, High Efficiency Solar PV Modules, White Goods (ACs & LED) and Speciality Steel.
Stimulus for stressed sectors expected
According to a Reuters report citing government officials, the stimulus will total about billion. It further said that Prime Minister Narendra Modi, FM Sitharaman and other top officials will finalise the plan on Thursday. Without providing details of the package, the sources said that it would be targeted towards stressed sectors with a focus on generating employment.
Will the fiscal deficit rise?
Benchmark indices were lower after three days of hitting historic highs. One will have to wait and see if the stimulus could have an impact on the fiscal deficit.
