India's economy, which was once the world's fifth biggest, has been contracting for some time. The nation is still suffering from the consequences of the earlier this year's lockdowns, and as a result, GDP growth fell about 24% in the second quarter of this year compared to the same time last year. The Reserve Bank of India said a few days ago that India's GDP would most likely fall by 8.6% in the next quarter.
Despite the bleak picture, Finance Minister Nirmala Sitharaman is optimistic that the economy would recover. "India's economy is witnessing a solid revival," she remarked, citing more GST revenue and increasing energy consumption. She also presented Aatmanirbhar Bharat 3.0, a new stimulus package, yesterday to guarantee that the economy remains on track.
To stimulate the economy, the package includes 12 additional initiatives totalling Rs 2.65 lakh crore. Cheap bank loans for beleaguered sectors, support for companies hiring new employees, tax breaks for home buyers, a production-linked incentive scheme for ten sectors, a grant for the development of a COVID-19 vaccine, and a stimulus for defence equipment, industrial infrastructure, and renewable energy are among the measures.
Sitharaman went on to say that she would make 12 announcements as part of Aatmanirbhar Bharat 3.0:
1. Finance Minister Arun Jaitley launched the new Aatmanirbhar Bharat Rozgar Yojana, which would encourage the development of new employment. During the COVID-19 epidemic, new workers employed by EPFO-registered organisations will be eligible for benefits.
2. MSMEs, enterprises, MUDRA borrowers, and individuals (loans for business purposes) have had their Emergency Credit Line Guarantee Scheme (ECLGS) extended till March 31, 2021, according to Sitharaman.
Entities having outstanding credit of more than Rs 50 crore and up to Rs 500 crore in the 26 stressed industries listed by the Kamath Committee, as well as the healthcare sector, would be covered.
3. A Rs 1.46 lakh crore Production Linked Incentive (PLI) plan is being provided to ten industries, the minister said, adding that this would assist increase local manufacturing's competitiveness. For the next five years, a total of approximately Rs 1.5 lakh crore has been set aside across industries.
4. The finance minister approved an extra expenditure of Rs 18,000 crore beyond the budget estimate for the PM Awaaz Yojana Urban, which would assist in the construction of 12 lakh dwellings and the completion of 18 lakh houses.
According to the government, this would result in the creation of an extra 78 lakh employment as well as improved steel and cement production and sales, resulting in a multiplier impact on the economy.
5. Contract performance security will be decreased from 5-10% to 3% in the construction/infrastructure industry. For bid tenders, the EMD will no longer be necessary and will be replaced by the Bid Security Declaration. The exemptions will be in effect until December 31, 2021.
6. The government granted a tax break for developers and first-time home purchasers for homes worth up to Rs 2 crore.
For primary sales of residential units up to Rs 2 crore, the difference between circle rate and agreement value in real estate income tax would be enhanced from 10% to 20% with effect from now till June 30, 2021.
7. Nirmala Sitharaman said that the government will inject Rs 6,000 crore into the National Investment and Infrastructure Fund's (NIIF) debt platform, assisting the NIIF in generating Rs 1.1 lakh crore for infrastructure projects financing by 2025.
8. Farmers would get a fertiliser subsidy of Rs 65,000 crore.
9. The finance minister announced an additional allocation of Rs 10,000 crore for the PM Garib Kalyan Rozgar Yojana in the current fiscal year FY21.
10. Sitharaman announced the availability of an extra Rs 3,000 crore to EXIM Bank for project exports under the IDEAS initiative.
11. A budget boost of Rs 10,200 crore would be given for capital and industrial investment on military equipment, industrial infrastructure, and renewable energy.
12. The finance minister announced a Rs 900 crore research and development funding for COVID-19 vaccine development.
A total of Rs 2.65 lakh crore would be spent by the government for Aatmanirbhar Bharat 3.0. With this, the government's entire investment on COVID-19 pandemic stimulus measures comes to roughly Rs 17.16 lakh crore, while the overall stimulus by the government and RBI comes to Rs 29.87 lakh crore, or 15% of India's GDP.
(Source: Indian Express)
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