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FM Nirmala Sitharaman announces stimulus 3.0, says indicators showing recovery in economy

The package included Rs 1.46 lakh crore production-linked scheme for ten sectors, which was cleared by the cabinet on Wednesday.

Published: 12th November 2020 01:28 PM  |   Last Updated: 12th November 2020 04:38 PM   |  A+A-

Nirmala Sitharaman along with Anurag Thakur, at a press conference in New Delhi.

Nirmala Sitharaman along with Anurag Thakur, at a press conference in New Delhi. (Photo | Shekhar Yadav, EPS)

By Express News Service

NEW DELHI: Ahead of Diwali, Finance minister Nirmala Sitharaman  announced Rs 2.65 lakh crore-stimulus package to support generating employment, extending credit guarantee scheme to Covid-hit sectors,  fertilizer subsidy for farmers and increased outlay for  rural employment scheme and a Rs 18,000 crore stimulus for the realty sector.

The package included Rs 1.46 lakh crore production-linked scheme for ten sectors, which was cleared by the cabinet on Wednesday.

Employment scheme

Confident of a strong recovery of the Indian economy, the Finance Minister announced “Aatmanirbhar Bharat Rozgar Yojana”, under which EPF-registered organisations would get benefits on recruiting new people who didn’t have EPFO before or those who lost their jobs between March 1 and September 30.

The scheme will cover any new employee joining employment in EPFO-registered establishment on monthly wages less than Rs 15,000.  

“Employees contribution (12 per cent of wages) and employer’s contribution (12 per cent of wages) totaling 24 per cent of wages would be given to establishments for two years,” Sitharaman said. 

The scheme will be operational till June 30, 2021 and to avail the establishments with up to 50 employees will have to add a minimum of two new employees and those with more than 50 staff, will have to give a minimum of five new jobs.

ALSO READ: Moody's revises upwards India GDP forecast to -8.9 per cent contraction in 2020

On rural employment

To boost rural employment, Sitharaman announced an additional outlay of Rs 10,000 crore to be provided for PM Garib Kalyan Rozgar Yojana in the current financial year.

This will be additional amount over and above the earlier announced Rs 61,000 crore provided for MNREGA in the budget and an extra Rs 40,000 crore announced  in the first Atmanirbhar package. 

To help farmers the government announced an additional fertilizer subsidy of Rs 65,000 crore extended to farmers ahead of the Rabi crop.

Extending credit line guarantee scheme to COVID-hit sectors

The governmrnt extended the ambit of the Emergency Credit Line Guarantee Scheme to 26 stressed sectors identified by the Kamath committee and also healthcare sector. The Scheme is not extended till March 31. 

Realty sector gets special boost

With additional Rs 18,000 crore  provided for the Pradhan Mantri Awas Yojana.

To promote construction, the Finance Minister also announced a cut in performance security cut to 3 per cent from 5 per cent.

ALSO READ: GDP to contract 8.6 per cent in Q2; India has entered recession for first time: RBI official

The government also announced relaxations in income tax rules to allow sale of primary residential units of up to Rs 2 crore value below the circle rate.

“This measure will reduce hardships faced by both home-buyers and developers and help in clearing the unsold inventory,” Sitharaman said.

Other announcements

Another announcement was to infuse Rs 6,000 crore equity in NIIF Debt Platform,  Rs 10,200 crore extra outlay towards capital expenditure for roads, ports and defence projects.  

To boost exports, the finance minister said Rs 3,000 crore will be released to EXIM bank for promotion of project exports though the line of credit.

The government also committed Rs 900 crore provided provided for Covid Suraksha Mission for research and development of Covid-19 vaccine.

According to Chandrajit Banerjee, Director General, Confederation of Indian Industry (CII) said:  "FM has covered the key sections of society including farmers, workers, and enterprises with a prudent and carefully calibrated set of measures. Today’s package comprising employment incentive, infrastructure boost and export impetus greatly enthuses industry across the board".

Here is a breakdown of the stimulus package value of 2,65,080 crore: 

  • Housing for all (PMAY-U): Rs 18,000 crore
  • Boost for Rural Employment: Rs 10,000 crore
  • R&D Grant for COVID Suraksha (Indian vaccine development): Rs 900 crore
  • Industrial infrastructure, Industrial incentives and Domestic defence equipment: Rs 10,200 crore
  • Boost for Atmanirbhar manufacturing - Production-linked incentives: Rs 1,45,980 crore
  • Support for agriculture - Fertiliser subsidy: Rs 65,000 crore
  • Boost for infrastructure - Equity infusion in NIIF Debt PF: Rs 6,000 crore
  • Atmanirbhar Bharat Rozgar Yojana (Overall Rs 36,000 crore): Rs 6,000 crore

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