The announcements made by the Finance Minister Nirmala Sitharaman on Sunday concluded the relief measures undertaken in five tranches by the government as part of the economic package announced by PM Modi for ‘Atmanirbhar Bharat’. The minister, towards the end of her speech, also provided a tranche-wise complete break-up of the stimulus. Importantly, the overall package which stood at Rs 20,97,053 crore, included the Rs 1.92 lakh crore stimulus from measures announced by Modi recently such as the Pradhan Matri Garib Kalyan Package worth Rs 1.7 lakh crore. A big chunk, in fact the largest, worth Rs 8.01 lakh crore of the economic package belonged to the various measures by the Reserve Bank of India in February, March and April this year to inject liquidity. Below is the complete break-up of the package launched to make India ‘self-reliant’ amid and post Covid times.
First tranche – Rs 5,94,550 crore
The first set of relief measures announced by Nirmala Sitharaman focused on enabling the Indian economy’s backbone – MSMEs that employ around 11 crore people and have a GDP share of approximately 29 per cent. Out of the 16 announcements made by the minister, six were dedicated to the MSME segment to infuse liquidity. This included Rs 3 lakh crore collateral-free loans and Rs 50,000 crore equity infusion for MSMEs through Fund of Funds. Liquidity relief measures worth Rs 30,000 crore were also announced for NBFCs, HFCs etc. and Rs 90,000 crore for power distribution companies. The minister also advised states and regulatory authorities for extending the registration and completion date of real estate projects under RERA to de-stress developers and ensure completion of projects for homebuyers to get their booked houses on time.
Second tranche – Rs 3,10,000 crore
Nirmala Sitharaman’s second tranche of measures catered to migrant workers and street vendors. The minister introduced ‘one nation one ration card’ to allow migrant workers to buy ration from any depot in the country. A special credit facility of Rs 5,000 crore was announced to support around 50 lakh street vendors who will have access to an initial Rs 10,000 working capital. The minister also said that close to Rs 2 lakh crore will be given to farmers through Kisan credit cards while 2.5 crore farmers, including fishermen and animal husbandry farmers, would be able to get institutional credit at a concessional rate. The government allowed states to fund the food and shelter facilities to migrant workers from the disaster response fund that would cost Rs 11,000 crore to the centre.
Third tranche – Rs 1,50,000 crore
The third tranche of the measures worth Rs 1.5 lakh crore focused on the agriculture and allied sectors including dairy, animal husbandry and fisheries as the government announced steps to strengthen the overall farm sector. Sitharaman announced Rs 1 lakh crore agriculture infrastructure fund for farm-gate infrastructure including using it for setting up cold chains and post-harvest management infrastructure. Other key announcements made by the minister included Rs 20,000 to be provided to fishermen through Pradhan Mantri Matsya Sampada Yojana, and Rs 10,000 crore to formalize micro food enterprises. “This will be a cluster-based approach, with which, local value-added products can reach global markets,” the minister had said. Rs 4,000 crore for herbal cultivation, a Rs 15,000 crore Animal Husbandry Infrastructure Development Fund, Rs 500 crore for bee-keeping related infrastructure development were other packages announced by the minister.
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Fourth and fifth tranches – Rs 48,100 crore
The fourth instalment of the Rs 20 lakh crore package comprised of reforms for sectors including coal, minerals, defence production, air space management, airports, MRO, distribution companies in UTs, space sector, and atomic energy. Nirmala Sitharaman on Saturday announced easing utilization of the Indian air space to reduce air travel cost. The minister also announced the commercial mining in the coal sector and privatizing discoms in metros to streamline their functions for better accountability. The minister also talked about private participation in the space sector along with coming up with a policy for private players.
On Sunday, the minister allocated an additional Rs 40,000 crore for the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) for job creation in India’s hinterland. The government had earlier allocated Rs 61,000 crore in the budget for this financial year. Sitharaman also announced the formulation of a new Public Sector Enterprises Policy that would allow for consolidation of the PSU firms in strategic sectors. Each sector would have up to four such firms while state-owned enterprises will be privatized. For improved ease of doing business among MSMEs, the minister extended the initiation period of fresh insolvency proceedings against MSMEs by six months to up to one year along with excluding Covid-19 related debt from the ‘default’ category under the IBC Code.