Finance Minister Nirmala Sitharaman economic stimulus announcements: Union Finance Minister Nirmala Sitharaman on Thursday announced new stimulus measures under Atmanirbhar Bharat Abhiyaan 3.0 to boost the Indian economy amid the ongoing COVID-19 pandemic. The finance minister’s announcements come one day after the Cabinet approved the Production-Linked Incentive (PLI) scheme for 10 champion sectors including textiles, food, electronic and technology products, automobiles, and auto components manufacturing, among others. The PLI scheme for the 10 identified sectors will be operational for five years with a total estimated outlay of Rs 1.46 lakh crore.
Here are key takeaways from Atmanirbhar Bharat Abhiyaan 3.0 economic stimulus package:
Atmanirbhar Bharta Rozgar Yojana: Ms. Sitharaman announced the new Aatmanirbhar Bharat Rozgar Yojana which will incentivize the creation of new jobs. The new employees hired by the EPFO-registered organizations will receive benefits during COVID-19. If the EPFO registered establishments take in new employees or those who lost jobs earlier will get benefits from the government.
Emergency Credit Line Guarantee Scheme: The emergency credit line guarantee scheme (ECLGS) for MSMEs, businesses, MUDRA borrowers, and individuals (loans for business purposes), has been extended till March 31, 2021. A credit guarantee support scheme for the health care sector and 26 sectors stressed due to the COVID-19 pandemic was also launched. The entities of the 26 stressed sectors are identified by Kamath Committee.
Production-Linked Incentive: The PLI scheme worth Rs 1.46 lakh crore is being offered to 10 champion sectors which will help boost the efficiency and competitiveness of domestic manufacturing. A total amount of Rs 1.5 lakh crore has been earmarked across sectors, for the next five years.
Pradhan Mantri Awaaz Yojana Urban: An additional outlay of Rs 18,000 crore over budget estimate towards PM Awaaz Yojana Urban has been announced which will help ground 12 lakh houses and complete 18 lakh houses. This will create additional 78 lakh jobs and improve the production and sale of cement and steel.
Relaxation of Earnest Money Deposit (EMD): The performance security on government contracts in the construction/infrastructure sector will be reduced to 3 percent from 5-10 percent. EMD will not be required for bid tenders and will be replaced by Bid Security Declaration. The relaxations will be applicable till December 31, 2021.
Income Tax Relief for Developers and Home Buyers: The finance ministry announced tax relief for developers and home buyers for houses up to Rs 2 crore. The differential between circle rate and agreement value in real estate income tax is being increased from 10 percent to 20 percent from today (November 12, 20) till June 30, 2021, for primary sale of residential units up to Rs 2 crore the income tax relief provides an incentive to the middle class to buy homes, Ms. Sitharaman said.
Equity Investment in Debt Platform by NIIF: The government will make Rs 6,000 crore equity investment in the debt platform of the National Investment and Infrastructure Fund (NIIF), which will help NIIF raise Rs 1.1 lakh crore by 2025 for financing infrastructure projects.