In a series of announcements for the fiscal stimulus provided by the Government of India to battle the economic downturn induced by the coronavirus outbreak, Finance Minister Nirmala Sitharaman on May 18 declared the last tranche of the Rs 20 lakh crore Atmanirbhar Bharat Abhiyan economic package.
The relief package announced by the government includes a host of measures such as free food grains for distraught migrant workers, hike in foreign direct investment in defence, liquidity measures for the MSMEs, changes in Essential Commodities Act, increase in public expenditure in health, among others.
Here’s the split-up of the overall economic stimulus package:
The first tranche of the economic relief package worth Rs 5.94 lakh crore provided liquidity measures to shore up small and medium business and support to shadow banks and electricity distribution companies. The definition of the MSME was changed and the threshold to qualify as MSMEs were raised. One of the significant announcement made by FM Sitharaman in the first tranche of economic stimulus package was Rs 3 lakh crore collateral-free automatic loans for businesses.
|1||Emergency W/C facility for Businesses, including MSMEs||3,00,000|
|2||Subordinate debt for stressed MSMEs||20,000|
|3||Fund of Funds for MSMEs||50,000|
|4||EPF support for Business and Workers||2,800|
|5||Reduction in EPF rates||6,750|
|6||Special liquidity scheme for NBFC/HFC/MFIs||30,000|
|7||Partial credit guarantee scheme 2.0 for liabilities of NBFCs/MFIs||45,000|
|8||Liquidity Injection for DISCOMs||90,000|
|9||Reduction in TDS/TCS rates||50,000|
Totally Rs 3.1 lakh crore, the second tranche of the economic relief package included free food grains to the migrant workers across the country who have been amongst the worst-affected sections of the population from the economic tailspin caused by the coronavirus outbreak. A total of 9 announcements were made in the second tranche, which included free food grains to migrant workers for 2 months, national portability of ration cards, which permitted people to take ration from any public distribution unit in the country.
|1||Free Food grain supply to migrant workers for 2 months||3,000|
|2||Interest Subvention for Mudra Shishu loans||1,500|
|3||Special credit facility to street vendors||5,000|
|5||Additional Emergency Working Capital through NABARD||30,000|
|6||Additional Credit through KCC||2,00,000|
The third tranche of the economic stimulus package saw the finance minister Nirmala Sitharaman allocating money for the Agricultural, Animal Husbandry and the ancillary sectors. A whopping Rs 1,00,000 crore was earmarked for bolstering the agricultural infrastructure in the country under Agri Infrastructure Fund. The government also declared that the Essential Commodities Act will be amended to deregulate prices of cereals, edible oils, oilseeds, pulses, onions, potatoes etc. Stock limit imposed on processors or value chain participants or any exporter subject to export demand was also removed by the government.
|1||Food Micro Enterprises||10,000|
|2||Pradhan Mantri Matsya Sampada Yojana||20,000|
|3||TOP to Total: Operation Greens||500|
|4||Agri Infrastructure Fund||1,00,000|
|5||Animal Husbandry Infranstructure Development Fund||15,000|
|6||Promotion of Herbal Cultivation||4,000|
Part 4 and 5
The fourth and fifth tranche of the investment largely dealt with bringing about structural reforms. About Rs 40,000 crore allocation was added to the Mahatma Gandhi Rural Employment Guarantee Act(MGNREGA) and about Rs 8,100 crore for Viability. Gap Funding.
|1||Viability Gap Funding||8,100|
|2||Additional MGNREGS allocation||40,000|
Overall stimulus by Atmanirbhar Bharat Package
While the five tranches of stimulus package announced by the government totalled Rs 11,02,650 lakh crore, the relief measures declared by the government including the earlier scheme of Pradhan Mantri Garib Kalyan Package(PMGKP) worth Rs 1,92,800 crore and the measures announced by the RBI to tackle the economic downturn as the country staggers under the economic shadow of the coronavirus lockdown. The RBI package which is pegged at Rs 8,01,603 crore includes measures like moratorium on loan repayments for all borrowers and interest rate cuts etc.
|4||Part 4 and 5||48,100|
|5||Earlier Measures including PMGKP||1,92,800|
The Finance Minister said that the last tranche will focus on 7 sectors- MGNREGS, Health (rural and urban) and Education related, businesses and coronavirus, decriminalisation of Companies Act, Ease of Doing Business, Public Sector Enterprises- related steps and state governments and related resources.