To help revive the Covid 19 battered Indian economy, in continuation of its previous stimulus package, FM Nirmala Sitharaman today announced Atmanirbhar Bharat 3.0 comprising a total of 12 measures. And the total relief to fight coronavirus including the latest package worth Rs. 9 lakh crore now amounts to Rs. 29.87 lakh crore, which is 15% of India's GDP.
Before announcing the key measures, the FM reflected on the current state of the economy and stated that few of the macros indicate a faster recovery and that is not owing to pent-up demand but shall be sustainable. Here are all the steps in a nutshell:
1. To boost job creation, Atmanirbhar Bharat Rozgar Yojana launched:
· As part of the scheme, subsidy as retirement contribution will be extended to establishments registered under EPFO and hiring new employees.
· The establishments that have up to 1000 employees, for them 12% of employer as well as 12% of employee towards retirement fund or PF will be contributed by the centre while for others only 12% of employee contribute will be made.
· The contribution shall be made for two years time.
· The scheme shall be running from October 1 and up till June 30, 2020
· And this is for new employees who earn monthly wage of less than Rs. 15000 or those who have lost job between March 1 and September 30, 2020.
2. Emergency Credit Line Guarantee Scheme or ECLGS extended:
· Earlier extended by a month to November 30, 2020, this scheme shall now be running until March 31, 2021. Under the scheme government guaranteed and totally collateral free loan of up to 20% of outstanding loans will be extended to entities with outstanding credit up to Rs 50 crore and annual turnover up to Rs 250 crore.
· For availing the credit facility, individual borrowers including professionals, businesses and MSMEs as well as MUDRA borrowers are eligible.
· ECLGS 2.0 Launched- This is targeted at 26 stressed sectors identified by the KV Kamath committee. Under the scheme, the sectors worst hit by the Covid 19 pandemic will be able to secure 100 percent guaranteed credit of up to 20% of outstanding loan.
· Also as part of ECLGS 2.0 healthcare sector with credit outstanding of above Rs 50 crores and upto Rs 500 crores will also be able to avail credit at capped interest rates.
· Notably there is no upper ceiling with respect to the annual turnover.
3. PLI scheme to boost manufacturing in India and counter China
Under the PLI or production linked incentive scheme which has now been extended to cover 10 more sectors, there is pegged a total outlay at Rs. 1.46 lakh crore, with a lion share for the automobile and auto-component sectors.
4. Middle income group provided incentive to buy home:
· For sale of residential property of value up to Rs. 2 crore, the differential between circle rate and agreement value has been increased from 10% to 20%. This has been implemented till June 30, 2021.
5. Fertiliser subsidy for farmers:
· A subsidy worth Rs. 65000 crore has been announced for farmers such that adequate supply of fertilizer is maintained
· Also, for promoting ‘Project Exports' via line of credits, Rs. 3000 crore will be extended to Exim Bank.
6. PM Awaas Yojana-Urban (PMAY-U):
· Through additional outlay, Rs. 18000 crore will be extended for PMAY-U over and above the budget estimates.
· The move will result in the creation of 78 lakh jobs
· And as many as 18 lakh houses can be completed and 12 lakh houses can be grounded.
7. Rural economic growth to be boosted through special outlay
· Rs. 10000 crore will be offered to PM PM Garib Kalyan Rozgar Yojana in the ongoing FY for accelerating rural economic growth.
· Until date under MGMREGA a total of Rs. 73504 crore has been released and and 251 crore person-days of employment have been guaranteed.
8. Boost for Project Exports:
· Under the Ideas scheme, Rs. 3000 crore will be extended to Exim Bank for promotion of project exports through lines of credit (LOC) under the IDEAS scheme.
· Also, EXIM Bank has extended LOC on government's behalf as help to developing nations and encourages Indian export by giving a mandate that recipient nations need to import 75 per cent value of the LOC.
9. Capital and Industrial Expenditure:
For the capital and industrial expenditure, as part of the latest stimulus, Rs. 10200 crore has been earmarked and is for
domestic defence equipment, industrial incentives, industrial infrastructure and green energy.
10. Infrastructure debt financing:
Rs 6,000 crore of equity to be provided to the debt platform. By 2025, they will have to fund projects worth Rs 1,10,000 crore.
11. For Covid 19 vaccine research:
For research in the area of Covid 19 vaccine, the grant of Rs. 9000 crore has been provided to the Department of Biotechnology. Notably this is not covering for the actual cost of vaccine and distribution expenses.
12. Contractors extended relief:
· For government tenders, Earnest money deposit (EMD) and performance security shall be eased by lowering locking up of capital.
· Performance security on contracts will be reduced to 3 per cent, and will be extended to ongoing contracts which are free of disputes.
· EMD will not be required for tenders, being replaced by Bid Security Declaration.