Explainer: Nirmala Sitaraman’s 5 phase’ AtmaNirbhar Bharath’ package

By Aiswarya Sriram  Published on  17 May 2020 11:43 AM GMT
Explainer: Nirmala Sitaraman’s 5 phase’ AtmaNirbhar Bharath’ package

Hyderabad: On Sunday, Finance Minister (FM) Nirmala Sitharaman finished announcing the entire reform package under ‘Atmanirbhar Bharath Abhyan’. The Rs 20 lakh crore package had several beneficiaries in different sectors. Here is a breakup of the package.

Phase 1

On the first day, Nirmala Sitharaman announced the beneficiaries under the Medium, Small and Micro Enterprises (MSME), Non-Banking Financial Sector (NBFC) and reduction in Employers Provident Fund rate and tax rates. Out of the Rs 20 lakh crore package, Rs 5,94,500 crore package was announced on May 13 by the FM.

The first day package included collateral free loans for businesses and MSMEs worth Rs 3 lakh crore. Apart from that, a package of Rs 20,000 crore was announced for stressed MSMEs. The government is infusing an equity of Rs 50,000 crore in MSMEs which have potential growth.

For Revival of NBFCs, the FM announced a liquidity scheme of Rs 30,000 crore. Further, a Rs 45,000 crore of partial credit guarantee scheme 2.0 was announced which will help them to provide loans to individual MSMEs.

For both employers and employees, provident fund rates were reduced from 12 per cent to 10 per cent. The reduction will lead to saving of Rs 6,750 crore and further EPF support provided for business and workers will provide a relief of Rs 2,800 crore.

Apart from that, liquidity injection was announced for DISCOMs to the tune of Rs 90,000 crore and a reduction in tax deducted at source (TDS) amounts to a relief of Rs 50,000 crore.

Phase 2

On Day 2, the Finance Minister announced packages worth Rs 3,500 crore. It was majorly for migrant labourers, farmers and working class.

The package of Rs 3,500 crore was set aside for free food grain supply to migrant labourers for the next two months. In the second tranche, she also announced interest subvention for Micro Units Development and Refinance Agency Bank (MUDRS) Shishu loans of Rs 1,500 crore. Special credit facility of Rs 5,000 crore was announced for street vendors.

An amount of Rs 70,000 crore was set aside for housing through which the government aims to provide affordable renting facilities to migrants. Besides, the FM said that through NABARD, additional re-finance support of Rs 30,000 crore will be provided for crop loans.

Through Kisan Credit Cards, farmers will be provided an additional credit of Rs 2 lakh crore, she said.

Phase 3

In the third tranche, the FM set aside a package of Rs 1.63 lakh crore for agriculture and allied sectors. To provide assistance to micro food industries, an amount of Rs. 10,000 crore has been sanctioned. An amount of Rs 15,000 crore was allocated as Animal Husbandry Infrastructure Development Fund and Rs 1 lakh crore as agriculture infrastructure fund.

The FM also sanctioned an amount of Rs 4,000 crore for herbal cultivation and Rs 500 crore for both Operation Greens and bee-keeping.

Phase 4 and 5

For development of social infrastructure, the FM announced Viability Gap Funding of Rs 8,100 crore and to boost employment in the country, an additional Rs 40,000 crore was allocated to Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA).

All these new packages announced by Nirmala Sitharaman amount to Rs. 11,02,650 crore, while the earlier schemes announced under Pradhan Mantri Garib Kalyan Programme and Reserve Bank of India amount to Rs. 9,94,403, which takes the whole package to a grand total of Rs 20,97,053 crore.

Next Story