Union Minister of Finance Nirmala Sitharaman has announced 12 key measures as part of the government of India’s stimulus to the economy under Aatmanirbhar Bharat 3.0.

 

The net stimulus announced amounts to Rs 2.65 lakh crore. The minister also informed that the total stimulus announced by the government and the Reserve Bank of India till date, to help the nation tide over  COVID-19 pandemic, works out to Rs 29.87 lakh crore, which is 15 percent of national GDP. Out of this, a stimulus worth nine percent of GDP has been provided by the government.

 

The following are the key announcements as part of Aatmanirbhar Bharat 3.0:

 

Aatmanirbhar Bharat Rozgar Yojana

 

A new scheme is being launched to incentivize job creation during COVID-19 recovery. If EPFO-registered establishments take in new employees without EPFO numbers or those who lost jobs earlier, the Yojana will benefit these employees. The scheme will be effective from 1 October 2020. The Central government will provide subsidy for two years with respect to new eligible employees engaged on or after 1 October 2020. The subsidy support to get credited upfront in Aadhaar seeded EPFO Account (UAN) of eligible new employee.

 

Emergency Credit Line Guarantee Scheme

 

The scheme for MSMEs, businesses, MUDRA borrowers and individuals (loans for business purposes) has been extended till 31 March 2021. Credit guarantee support scheme is being launched for the Healthcare sector and 26 sectors stressed due to COVID-19. Entities will get additional credit up to 20 percent of outstanding credit; repayment can be done in five years (one year moratorium + four years repayment). Entities in 26 stressed sectors were identified by the Kamath Committee plus the Healthcare sector with credit outstanding of above Rs 50 crore and up to Rs 500 crore as on 29 February 2020. Entities with outstanding up to Rs 50 crore previously covered under the existing scheme, no upper ceiling on annual turnover. Entities to be up to 30 days past due (SMA0) as on 29 February 2020. Additional credit up to 20 percent of outstanding as on 29 February 2020. 

 

Production Linked Incentive

 

The PLI worth Rs 1.46 lakh crore is being offered to 10 champion sectors which include Advance Cell Chemistry Battery, Electronics/Technology products, Automobile and Auto components, Pharmaceutical drugs, Telecom & Networking products, Textile products, Food products, High Efficiency Solar PV Modules, White Goods (AC & LED), Speciality Steel. This will help boost competitiveness of domestic manufacturing. This will give a big boost to economy, investment, exports and job creation. A total amount of nearly Rs 1.5 lakh crore has been earmarked across sectors for the next five years.

 

Rs 18,000 crore additional outlay for PM Awaas Yojana-Urban

 

This is over and above Rs 8,000 crore already allocated in 2020; it will help ground 12 lakh houses and complete 18 lakh houses;  create additional 78 lakh jobs and improve production and sale of steel and cement, resulting in multiplier effect on economy.

 

Support for construction and infrastructure – relaxation of earnest deposit money and performance security on government tenders

 

In order to provide Ease of Doing Business and relief to contractors whose money otherwise remains locked up, performance security on contracts will be reduced to three percent. EMD for tenders will be replaced by bid security self-declaration. The relaxations will be till 31 December 2021.

 

Income Tax relief for Developers & Home Buyers

 

Differential between circle rate and agreement value in real estate income tax is being increased from 10 percent to 20 percent. This is for primary sale of residential units up to Rs two crore (from the date of announcement of this scheme, till 30 June 2021). The Income Tax relief provides incentive to middle-class to buy homes.

 

Platform for Infra Debt Financing

 

The Central government will make Rs 6,000 crore equity investment in debt platform of the National Investment and Infrastructure Fund (NIIF), which will help NIIF raise Rs 1.10 lakh crore by 2025 for financing infrastructure projects.

 

Support for Agriculture: Rs 65,000 cr for subsidized fertilizers

 

As fertilizer consumption is going up significantly, increased supply of fertilizers will ensure that forthcoming crop seasons will not be affected for want of adequate fertilizers.

 

Boost for Rural Employment

 

An additional outlay of Rs 10,000 crore is being provided for PM Garib Kalyan Rozgar Yojana. The funds can be used for MGNREGA or for Gram Sadak Yojana to help accelerate rural economy.

 

Boost for Project Exports

 

A total of Rs 3,000 crore boost to be given for project exports through assistance given by India to developing countries under the Indian Development and Economic Assistance Scheme (IDEAS Scheme). This will help EXIM Bank facilitate the Line of Credit development assistance activities and promote exports from India.

 Capital and Industrial Stimulus

 

A total of Rs 10,200 crore additional budget stimulus will be provided for capital and industrial expenditure on defence equipment, industrial infrastructure and green energy.

 

R&D grant for COVID Vaccine

 

A sum of Rs 900 crore is being provided to the Department of Biotechnology for research activities related to COVID-19 vaccine development. This does not include cost of vaccine or logistics for vaccine distribution (whatever is required for that will be provided).