In keeping with the spirit of Dhanteras — worship of Dhanvantari, the God of Health, and Goddess Lakshmi — Finance Minister Nirmala Sitharaman on Thursday offered a ₹2.65-lakh-crore healing touch to various stressed sectors and individuals under Atmanirbhar Bharat 3.0 stimulus package
The third in the stimulus series focussed on housing, MSMEs, stressed and farm sectors, besides the inclusion of 10 sectors under the Production Linked Incentive (PLI) scheme of ₹1.45-lakh crore announced on Wednesday. Including today’s, the Centre has unveiled five stimulus packages. There has also been support of over ₹12.7-lakh-crore through measures announced by the RBI.
Under Atmanirbhar Bharat 3.0, incentives for the housing sector come via two components — income tax benefits and higher allocation for the Pradhan Mantri Awas Yojana - Urban.
Under the I-T scheme, the Centre has increased the differential between the circle rate and the agreement value to 20 per cent from the earlier 10 per cent. This could result in lower tax payout of up to 3 per cent. “This measure will reduce hardships and help in clearing the unsold inventory,” Sitharaman said. This applies to homes valued at not more than ₹2 crore.
For PMAY (Urban), where interest subsidy is given to certain categories of buyers, the government has raised allocation by ₹18,000 crore over and above the ₹8,000 crore provided in the Budget. “This will help 12 lakh houses to be grounded and 18 lakh units to be completed,” the FM said. It is expected to generate 78 lakh additional jobs and demand for 25 lakh tonnes of steel and 131 lakh tonnes of cement.
Extending the Emergency Credit Line Guarantee Scheme till March 31, the Centre said it will now also be available for 26 stressed sectors and healthcare.
While the first version of the scheme will remain, the new version will cover entities in 26 stressed sectors identified by the KV Kamath Committee plus the healthcare sector, with credit outstanding of above ₹50 crore and up to ₹500 crore as on February 29, 2020.
In both the versions, 20 per cent of credit dues will be given as working capital without any collateral. The rate of interest charged by banks will not exceed 9.25 per cent. While the first version provides one year moratorium on loans and three years for repayment, in the second version, it is one and four years, respectively. There is no change in the overall size of ₹3-lakh-crore worth of credit under the scheme. “We have utilised ₹2-lakh crore that went to smaller businesses. Now, we have a headroom of ₹1-lakh crore, so 26 stressed sectors which actually need money have been identified,” Financial Services Secretary Debashish Panda said.
To boost employment, the Centre has decided to bear the EPF contribution for two years for employees engaged on or after October 1, 2020, and earning up to ₹15,000 a month.
It has also been decided to provide an additional outlay of ₹10,000 crore for the PM Garib Kalyan Rozgar Yojana to boost employment in rural areas.
Sitharaman said an additional ₹65,000 crore will be provided for fertiliser subsidies over and above the ₹71,000 crore allocated in the Budget.
The package also includes an investment of ₹6,000 crore as equity in the National Infrastructure Investment Fund (NIIF), the release of ₹3,000 crore to EXIM Bank to promote project exports under the IDEAS scheme, ₹10,200 crore in additional budget outlay towards capital and industrial expenditure for domestic defence equipment, industrial incentives, industrial infrastructure and green energy and ₹900 crore for the vaccine R&D scheme, Covid Suraksha Mission.
While India Inc mostly hailed the stimulus, political reactions were mixed. The Congress said the announcements were not enough for a recession-hit economy.