From Job Creation to Credit Schemes, Sitharaman Announces New Stimulus Package

Dubbed the ‘Atmanirbhar Bharat 3.0’ package, the new announcements include a Rs 65,000-crore increase in fertiliser subsidy to farmers and tax relief for home buyers.

New Delhi: The Narendra Modi government on Thursday continued its string of relatively low-key ‘stimulus’ announcements with a new package aimed at boosting formal employment, increasing expenditure in the rural economy and an expansion of the India Inc’s production-linked incentive schemes.

Dubbed as the ‘Atmanirbhar Bharat 3.0’ package by finance minister Nirmala Sitharaman at press conference today evening, the new announcements also include a whopping Rs 65,000-crore increase in fertiliser subsidy to farmers for this financial year, tax relief for home buyers and an expansion of a government-backed credit guarantee scheme for several stressed corporate sectors.

Today’s stimulus measures are worth Rs 2.65 lakh crore, said Sitharaman, adding that the Reserve Bank of India recently predicted a strong likelihood of the Indian economy returning to positive growth in Q3 FY 21 and that recent economic recovery was not due only to pent-up demand.

One of the centrepiece announcements is the setting up of an Atmanirbhar Bharat Rozgar Yojna which incentivises companies in the formal sector to hire new employees and bring them into the EPFO net. The government, in turn, will bear the employee and employer contribution of 12% each.

To avail of benefits under this scheme, organisations with fewer than 50 employees will have to hire at least two employees, and those with more than 50 employees will have to hire 5 or more.

Also read: How India Was Stripped of Its Atmanirbharta in the Edible Oil Industry

Here are the broad highlights from Sitharaman’s press conference:

1) I-T relief for home buyers: For residential units worth up to Rs 2 crore, differential allowed between agreement value and circle rate has been increased from 10% to 20% till June 30, 2021.

2) PM Awas Yojana (Urban): Rs 18,000 crore to be provided over and above the Budget announcement to help 1.2 million houses be grounded and 1.8 million houses be completed

3) Additional Rs 10,000 crore spending to PM Garib Kalyan Yojana, likely to be spent either on MNREGA or Gram Sadak Yojana

4) To give relief to contractors in the construction and infra sectors, performance security deposit reduced to 3% till Dec 31, 2021, for projects without any dispute.

5) Extension of Rs 3 trillion Emergency Credit Line Guarantee Scheme till March 31, 2020. Announcement of ECLGS 2.0 for 26 stressed sectors identified by Kamath Committee

6) Rs 1.46 trillion boost for manufacturing Production Linked Incentives (PLI) for 10 champion sectors

7) Govt to provide Rs 65,000-crore fertiliser subsidy to farmers, move to benefit 14 million farmers

8) Rs 10,200-cr additional Budget outlay to promote industries and create industrial infra under Aatmanirbhar Bharat