Finance Minister Nirmala Sitharaman on Monday announced a massive Rs 6.29 lakh crore stimulus package to revive the Indian economy and help the country fight against the deadly COVID-19 pandemic.
The comprehensive measures aim to strengthen the healthcare sector and spur economic growth and employment with a booster dose for MSMEs, exports, revival of tourism and a big boost to the farm sector. Incentives for large scale electronics manufacturing have been further extended in the package along with the free foodgrains cushion for the poor.
Health sector
An additional Rs. 23,220 crore has been earmarked for public health. This comes on top of the Rs 15,000 crore Emergency Health Systems Project (2020-21) which led to a 25-fold increase in COVID dedicated hospitals and other facilities for coronavirus patients.
The new scheme is focused on short term emergency preparedness with special emphasis on children and paediatric care. It includes funding for short-term HR augmentation through medical students, interns, residents, final year and nursing students . It aims to increase availability of ICU beds, oxygen supply at central, district and sub-district level. Ensuring adequate availability of equipment, medicines and increasing testing capacity, supportive diagnostics and genome sequencing.
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The government will expand guarantees on loans to businesses to 4.5 lakh crore from an earlier limit of Rs 3 lakh crore, the finance minister told reporters. It will provide a guarantee of Rs 1.1 lakh crore on loans to the health sector and medical infrastructure that will enable them to raise loans at a lower interest rate of 8-8.25% a year, she explained.
The support comes on the back of RBI’s separate measures last month which provided an on-tap liquidity window for banks worth Rs 50,000 crore to extend credit to health services and vaccine manufacturers until March 2022.
Reviving Tourism
Financial support will be extended to more than 11,000 registered travel and tourism stakeholders. Under the new Loan Guarantee Scheme for COVID affected Sectors, working capital and personal loans will be provided to people in the tourism sector to discharge liabilities and restart businesses impacted due to COVID-19. Loans will be provided with 100 % guarantee and no additional collateral will be required. Once Visa issuance is restarted, the first 5 lakh Tourists Visas will be issued free of charge. The government has estimated that an average daily stay for a foreign tourist in India is 21 days. Average daily spending of a tourist in India is around $34 (Rs 2400).
Extension of Atmanirbhar Bharat Rozgar Yojana
The scheme which was launched on 1st Oct, 2020 to incentivizes employers for creation of new employment. An additional outlay of Rs. 22,810 crore has been approved to extend the scheme to march 31 next year to benefit 58.50 lakh people.
Improving Farmers’ Income
Additional amount of Rs.14,775 crore has been provided for fertiliser subsidy for farmers and new seeds will also be to be provided. Release of climate resilient special crop varieties.
Earlier focus of research was on developing higher yield crop varieties. Attention towards nutrition, climate resilience and other traits was missing. ICAR has developed bio-fortified crop varieties having high nutrients like protein, iron, zinc, vitamin-A and will 21 such varieties of rice, peas, millet, maize, soyabean, quinoa, buckwheat, winged bean, pigeon pea & sorghum will be dedicated to the nation.
Free foodgrain for poor
Another Rs 93,869 crore has been allocated to ensure free food for the poor with the extension of Pradhan Mantri Gareeb Kalyan Anna Yojana (PMGKAY), bringing the total cost of the scheme to Rs 2,27,841 Crore
Exports
An additional amount of Rs 33,000 crore is being provided to boost project exports through National Export Insurance Account (NEIA). The Export Credit Guarantee Corporation (ECGC) promotes exports by providing credit insurance services. Its products support around 30% of India’s merchandise exports. It is proposed to infuse equity in ECGC over 5 years to boost export insurance cover by Rs. 88,000 crore.
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Extension of PLI Scheme for Electronics Manufacturing
The scheme provides 4 to 6% cash incentives on incremental sales of goods under target segments that are manufactured in India, for a period of five years. The companies have not been able to achieve incremental sales condition due to disruption in production activities because of pandemic related lockdowns, – restrictions on movement of personnel – delay in installation of relocated plant and machinery – disruption in supply chain of components. The tenure of the scheme launched in 2020-21 is proposed to be extended by one year i.e. till 2025-26. Participating companies will get option of choosing any five years for meeting their production targets under the scheme. Investments made in 2020-21 will continue to be counted as eligible investments.
Rs 3.03 Lakh Cr for Reform Based Power Distribution Scheme
Revamped reforms-based, result-linked power distribution scheme of financial assistance to state DISCOMS for infrastructure creation, up-gradation of system, capacity building and process improvement. New policy will be formulated for appraisal and approval of PPP proposals and monetization of core infrastructure assets, including through InvITs. Aim is to ensure speedy clearance of projects to facilitate private sector’s efficiencies in financing construction and management of infrastructure.
