Govt announces new stimulus worth Rs 2,65L cr

Govt announces new stimulus worth Rs 2,65L cr

NEW DELHI: Union finance minister Nirmala Sitharaman said on Thursday that India’s economy is seeing a strong recovery taking root and announced a series of new measures to provide further boost to Covid-hit economy.
Sitharaman said increased energy consumption, a rise in the purchasing managers’ index, improved bank credit and a stock market surge all suggested stimulus measures taken so far had begun to help the economy bounce back.
The size of the stimulus being provided by the government, as part of the 12 announcements made under “Atmanirbhar Bharat 3.0”, amounts to Rs 2.65 lakh crore (around 15% of national GDP), Sitharaman stated.
Here are the key points of new stimulus package:
* First, finance minister Sitharaman announced a new ‘Atmanirbhar Bharat Rozgar Yojana’ to incentivize job creation. Beneficiaries under the new scheme include any new employee joining employment in EPFO registered establishments on monthly wages less than Rs 15,000. If new employees of requisite number are recruited from October 1, 2020 to June 30, 2021, the establishments will be covered for next two years.
* Second, Emergency Credit line Guarantee Scheme (ECLGS) has been extended till March 31, 2021. Also, tenor of credit under ECLGS 2.0 to be five years, including one year moratorium on principal repayment.
* Third, Rs 1.46 lakh crore boost manufacturing sector with production-linked incentive for 10 sectors such as mobile manufacturing, electronic components and pharma. This is expected to give a significant boost to economic growth and domestic employment.
* Fourth, Rs 18,000 crore additional outlay for PM Awaas Yojana (PMAY-Urban). This will help 12 lakh houses to be grounded and 18 lakhs to be completed.
* Fifth, support for construction and infrastructure – relaxation of earnest money deposit (EMD) and performance security on government tenders. Performance security on contracts to be reduced to 3% instead of 5 to 10%. Also, END will not be required for tenders.
* Sixth, demand booster for residential real estate sector with income tax relief for developers and home buyers.
* Seventh, Rs 1.10 lakh crore platform for infra debt financing with Rs 6,000 crore equity infusion in NIIF debt platform.
* Eighth, extending support to the agriculture sector, Rs 65,000 crore has been provided for subsidised fertilizers.
* Ninth, additional outlay of Rs 10,000 crore under PM Garib Kalyan Rozgar Yojana will be provided in the current financial year. It can be used for schemes including MGNREGA and PMGSY.
* Tenth, Rs 3,000 crore will be released to EXIM bank for promotion of project exports through lines of credit.
* Eleventh, Rs 10,200 crore additional budget outlay will be provided towards capital and industrial expenditure.
* Twelfth, Rs 900 crore provided for Covid Suraksha Mission for research and development of Indian vaccine to department of biotechnology.
* Other economic measures announced: Under Partial Credit Guarantee Scheme, public sector banks have bought portfolios worth nearly Rs 27,000 crore. To infuse liquidity into discoms, loans worth Rs 1.18 lakh crore has been sanctioned, loans worth more than Rs 31,000 crore disbursed: Sitharaman
* Under Emergency Credit Liquidity Guarantee Scheme, a total amount of Rs 2.05 lakh crore has been sanctioned to 61 lakh borrowers, out of which Rs 1.52 lakh crore has been disbursed: FM
* Credit boost has been given to 2.5 crore farmers through ‘Kisan Credit Cards’, Rs 1.4 lakh crore has been distributed to farmers, Sitharaman said while explaining progress of schemes under ‘atmanirbharbharat’ package.
* 28 states have been brought under ‘One Nation One Ration Card’ scheme, 68.6 crore beneficiaries can hence lift food grains from any of these 28 states/UTs. Around 14 lakh loans have been sanctioned under PM Street Vendor’s Atmanirbhar Nidhi scheme for street vendors: Sitharaman
* Moody’s has reassessed India’s 2020 GDP growth at -8.9% (as against -9.6% earlier). For 2021, they have revised estimate to 8.6% (from 8.1% earlier). This shows that a positive correction is happening as regards our economic prospects: Finance minister
* RBI predicts a strong likelihood of return to positive growth in Q3 of 2020-21. Various unrelenting systemic reforms have helped in this: Sitharaman
* Economy has staged a strong recovery with growth in GST collections, bank credit, FDI inflows along with other indicators: FM
* Today’s address will be in addition to the the steps in the series of stimulus packages and other economic measures: Sitharaman
*Centre’s last package: The government’s last stimulus package in May this year largely failed to soften blow of the strict coronavirus lockdown as it focused on providing liquidity and collateral-free credit for small businesses but with little actual spending. That package also left out badly hit sectors such as tourism, hospitality and aviation.
* Economic front: The Indian economy, which the International Monetary Fund (IMF) singled out as a global bright spot only a few years ago, contracted a hefty 23.9 per cent in the April-June quarter and is seen contracting over 10 per cent in the fiscal year to March 2021.
* Recession: India will enter into a recession for the first time in history in the first half of this fiscal with two successive quarters of negative growth due to the Covid-19 pandemic, as per an RBI official. “India has entered a technical recession in the first half of 2020-21 for the first time in its history with Q2 2020-21 likely to record the second successive quarter of GDP contraction,” as per the article titled ‘Economic Activity Index’, authored by Pankaj Kumar of the Monetary Policy Department.
Source From : Times Of India

Related Articles

Leave a Reply

Your email address will not be published. Required fields are marked *