Modi Government Launches Aatmanirbhar Bharat 3.0

Modi Government Launches Aatmanirbhar Bharat 3.0

Finance Minister Nirmala Sitharaman on Thursday announced stimulus measures to aid job creation and boost the key real estate and infrastructure sectors, under the government's Atmanirbhar Bharat 3.0 package, aimed at rescuing the economy out of a historic contraction. "Several indicators have been showing that recovery is clearly happening in the economy... The strong recovery is based on the unrelenting reforms that the government has brought in a systematic manner,"  the Finance Minister said in a media briefing. Asserting that the latest set of measures take the overall monetary and fiscal support for the economy to  29.88 lakh crore, the finance minister said it is equivalent to 15 percent of the country's GDP. 

The announcements come at a time when economists have called for the need for the further impetus to aid a revival in an economy battered by the world's biggest lockdown to curb the spread of COVID-19. 

                           Key highlights of Finance Minister Nirmala Sitharaman's media briefing:

  • Going to announce a few new measures
  • First, would like to give you a picture of the economic situation, and the impact on Atmanirbhar Bharat announcements made recently
  • Active cases of COVID-19 have declined 
  • In the last 10-15 days, there have been many measures and indicators showing recovery happening
  • The strong recovery is based on unrelenting reforms brought by the government in a systematic manner
  • GST collections were at  1.05 lakh crore in October, up 10% year-on-year
  • FDI inflows stood at $35.37 billion in April-August, up 13%
  • Bank credit growth has improved compared to last year, up.5.1% year-on-year (as of October 23)
  • Markets are at record highs, with market capitalizations at record levels.
  • RBI's forex reserves have reached $560 billion
  • RBI predicts the strong likelihood of the economy returning to growth in Q3
  • Moody's has today revised India GDP projection to -8.9% (2020-21) from -9.6%
  • PROGRESS ON ATMANIRBHAR BHARAT 1.0 MEASURES:
    • Under the "One Nation, One Ration Card" scheme, interstate portability achieved in 28 states/Union Territories, covering 68.6 crore beneficiaries 
    • Intrastate portability also achieved, with 1.5 crore transactions a month
    • Under PM Steet Vendor's Atmanirbhar Nidhi (PM Svanidhi) scheme, 26.32 lakh loan applications received, 13.78 lakh loans (amounting to  1,373.33 crores) sanctioned in 30 states, and six UTs
    • Kisan Credit Card: Credit boost achieved for 2.5 crore farmers
    • 1.83 lakh applications received
    • Under ECLG 1.0,  2.05 lakh crore sanctioned to 61 lakh borrowers,  1.52 lakh crore disbursed 
    • Under a partial credit guarantee scheme, PSU banks approved the purchase of portfolios worth  26,889 crore
    • Under a special liquidity scheme for non-banking financial companies/housing finance companies,  7,227 crores disbursed
    • Rs 1,18,273 crore loans sanctioned to 17 states/UTs towards liquidity injection for power distribution companies,  31,136 crores already disbursed to 11 states/UTs
  • PROGRESS ON ATMANIRBHAR BHARAT 2.0 MEASURES (ANNOUNCED ON OCT 12):
    • Festival advance launched for government staff, SBI Utsav Cards being disbursed 
    • Leave Travel Concession (LTC) schemes launched
    • Rs 25,000 crore provided as additional capital expenditure (CAPEX) to road and defense ministries
    • Rs 3,621 crore sanctioned to 11 states as interest-free loans towards CAPEX 
    • PM Rozgar Protsahan Yojana (PMRPY) implemented up to March 31, to incentivize formalization, creation of jobs
    • Total benefit of  8,300 crore given to 1,52,899 companies covering 1,21,69,960 beneficiaries  

                                                        (ATMANIRBHAR BHARAT 3.0):

  • 12 areas to be covered
  • Announces Atmanirbhar Bharat Rozgar Yojana, aimed at incentivizing the creation of employment opportunities during the COVID-19 recovery phase
  • Beneficiaries under this new scheme will include: new employees joining employment in EPFO-registered establishments on monthly wages less than  15,000, and EPF members drawing monthly wage of less than  15,000 who exited employment during March-September and employed on or after October 1 
  • Central government to give subsidy on new employment 
  • Employee and employer contribution of 12% each to be borne by the government, for the next two years; aimed at easing the financial burden on companies for creating jobs
  • 95% of all (organized sector) establishments estimated to be covered under this scheme will have employees up to 1,000
  • Emergency Credit Line Guarantee Scheme (ECLGS) extended till March 31, 2021 (collateral-free, fully guaranteed loan)
  • MSMEs, business enterprises, individual loans for business purposes, MUDRA borrowers eligible for this scheme 
  • Rs 2.05 lakh crore already sanctioned to 61 lakh borrowers under this scheme,  1.52 lakh crore disbursed, as of November 12
  • ECLGS 2.0 - for supporting stressed sectors - to be utilized for 100% guaranteed collateral-free additional credit at a capped interest rate
  • Production-Linked Incentives (announced on Wednesday) for manufacturers expected to give a boost to the economy and domestic employment 
  • Rs 18,000 crore additional outlay (over and above Budget allocation of  8,000 crores) for an urban leg of PM Awaas Yojana (PMAY)
  • A No. of measures have already been taken over the past few months for the revival of housing and real estate; However, more measures needed to aid employment creation
  • The step will help in completing 18 lakh houses
  • 78 lakh additional jobs expected 
  • Income tax relief for developers and home-buyers, to boost demand for residential real estate
    • differential hiked to 20% from 10% till June 30 for only primary sale of residential units worth up to  2 crore  
  • Rs 1.1 lakh crore platform for Infra Debt Finance;  6,000 crore equity infusion in NIIF Debt Platform
    • Rs 6,000 equity infusion by government, rest to be raised from the private sector
  • Rs 65,000 crore support for agriculture in form of subsidized fertilizers
  • Increased supply of fertilizers at subsidized prices to help 140 million farmers
  • Amount to ensure adequate availability of fertilizers to farmers for the upcoming crop season
  • For exports: Assistance of  3,000 crores to be given to EXIM Bank for lines of credit
  • Supported projects cover areas such as Railways, power, transmission, road, transport, auto, auto components, sugar  
  • Rs 10,200 crore additional budget outlay towards capital and industrial expenditure
  • Areas to be covered: 
    • Domestic defense equipment
    • Industrial incentives
    • Industrial infra
    • Green energy
  • Rs 900 crore R&D grant for the development of a COVID-19 vaccine (COVID Suraksha Mission for Research and Development of Indian COVID Vaccine To Department Of Biotechnology)