Highlights of the AtmaNirbhar Package 3.0 announced by FM Nirmala Sitharaman

Union Finance Minister Nirmala Sitharaman today said the Indian economy is witnessing a strong recovery after a long and strict lockdown. Addressing a press conference to announce more stimulus measures to boost growth, she said macro-economic indicators are pointing towards recovery. Her address came a day after the Union Cabinet approved a ₹2 lakh crore production-linked incentive (PLI) package to boost demand in the country.

The central government has announced the second iteration of the emergency credit-linked guarantee scheme to support 26 stressed sectors and healthcare firms. Banks will be able to provide collateral-free, fully guaranteed loans to borrowers, on capped interest rates, Finance Minister Nirmala Sitharaman said while announcing 12 measures under Atmanirbhar Package 3.0 to boost the economy. The scheme will be available till March 31, 2021.

The key highlights of the event were:

The scheme aims to incentivize job creation. Under the new scheme, the beneficiaries will include any new employee joining employment in EPFO registered establishments on monthly wages less than Rs 15,000. If new employees of a requisite number are recruited from October 1, 2020, to June 30, 2021, the establishments will be covered for the next two years.

The entities registered under EPFO ​​will get benefit if they provide new jobs.

- Institutions with less than 50 people give new jobs to more than 2 people, then they will get the benefit of the scheme.

- An organization with more than 50 employees will have to hire more than 5 employees to take advantage of this scheme.

- Those who are not in EPFO ​​will not get the benefit, first they will have to register, only then they will get the benefit.

- This scheme will remain in force till 30 June 2021

The Emergency credit line guarantee scheme extended till March 31, 2021. Launch of Emergency credit line guarantee scheme 2.0 for guaranteed credit to 26 stressed sectors. The tenor of additional credit under ECLGS 2.0 to be 5 years, including 1 year of a moratorium on principal repayment.

Boost to manufacturing

Incentives worth Rs 1.46 lakh crore will be given to boost the manufacturing sector with a production-linked incentive for 10 sectors such as mobile manufacturing, electronic components and pharma. This is expected to boost India’s manufacturing capabilities and enhancing exports. A provision of Rs 40,995 crore has been made for mobile manufacturing in India. The raw material for making medicine should also be made in India and Rs 6940 crore have been allocated for it. A provision of Rs 3420 crore has been made for medical devices.

Rs 18,000 crores will be provided over the Budged Estimates for 2020-21 for PM Awaas Yojana (PMAY) - Urban through additional allocation and Extra Budgetary Resources. This is over and above Rs 8,000 crores already this year.

Support for Construction and Infrastructure

- Relaxation of Earnest Money Deposit (EMD) and Performance Security on Government Tenders

-Performance security on contracts to be reduced to 3 per cent instead of 5 to 10 per cent

-EMD will not be required for tenders and will be replaced by Bid Security Declaration

- Relaxations will be given till December 31, 2021.

Demand booster for Residential Real Estate Income Tax relief for Developers and Homebuyers

-Decided to increase the differential from 10 per cent to 20 per cent for the period from the date of the announcements to June 20, 2021, for only primary sale of residential units of value upto Rs 2 crore.

- Consequential relief upto 20 per cent shall be allowed to buyers of these units under section 56(2)x of the IT Act for the said period.

- Rs 1.1 lakh crore for a platform for Infra Debt Financing - Rs 6,000 crores equity infusion in NIIF Debt platform

- Government will invest Rs 6000 as equity and by 2025 provide infra project financing of Rs 110,000 crores

Support for Agriculture

- Rs 65,000 crore for subsidised fertilisers

- Enhanced outlays under PM Garib Kalyan Rozgar Yojana

- Rs 40,000 crore was additionally provided in AtmaNirbhar Bharat 1.0

- Further outlay of Rs 10,000 crore to be provided for PM Garib Kalyan Rozgar Yojana in the current financial year

- Rs 3,000 crore to EXIM bank for lines of credit

- Rs 3,000 crore will be released to EXIM bank for promotion of project exports through lines of credit under IDEAS Scheme