A day after announcing a scheme to boost manufacturing sector, Finance Minister Nirmala Sitharaman is meeting the press to announce more stimulus.

The government on Wednesday approved a Production-Linked Incentive (PLI) scheme for ten key sectors, including telecom, automobiles and pharmaceuticals, taking the total outlay for such incentives to nearly Rs 2 lakh crore over a five-year period.

Here are the live updates:

2.45 pm

Today’s announcements cover Rs. 2,64,080 crore. Totally, the government has spent or will be spending Rs. 29, 87, 641 crore on stimulus. This includes Rs. 12,71,200 crore announced by RBI over the months.

A total of 15% of GDP. You may divide that between the RBI and the government, she says.

2.40 pm

Rs.900 crore for R&D towards COVID-19 vaccine

Rs 900 crore is being provided for research and development towards the COVID-19 vaccine.

This money will go to the Department of Biotechnology under COVID Suraksha mission. This is exclusive from the actual cost of vaccine and logistics purposes. “When the vaccine is ready, whatever is required for that, as and when it is required, will be provided,” she says.

2.35 pm

Capital and industrial stimulus

Rs 10,200 crore are being additionally provided as stimulus towards capital and industrial expenditure. This is to make capital and industrial stimulus a priority.

 

2.30 pm

Rs. 3000 crore for EXIM Bank

We will boost exports through an additional Rs 3,000 crore to be given to the Exim Bank of India, for promoting exports under the Line of Credit scheme, says Finance Minister Nirmala Sitharaman.

When exports are mandated through it, most recipient countries get Indian firms executing projects such as railway lines, transmission lines and so on. 10.5 billion USD are provided through the line of credit. Now in order to facilitate the EXIM Bank of India to promote project exports, we have given Rs 3,000 crore just for this.

2.25 pm

PM Garib Kalyan Rozgar Yojana

The government has increased the outlay of Rs. 20,000 crore for the PPM Garib Kalyan Rozgar Yojana. The scheme, targetting migrant labourers who returned to their native places, was created integrating MNREGA and Grameen Sadak Yojana.

In the Budget, we had announced Rs 61,000 crore for MGNREGA and another Rs 40,000 crore in Atma Nirbhar Bharat 1.0. Now, what we are saying is that of the Rs 1 lakh crore, Rs 73,504 crore has already been spent and 251 crore person days of employment were generated and this is in the informal sector.

2.20 pm

Fertiliser subsidy

We are providing Rs 65,000 crore for fertiliser subsidy to benefit farmers. From 500 lakh metric tonnes that was the consumption in 2016-17, we expect consumption to rise to 673 lakh metric tonnes in 2020-21, she says.

So farmers are reaping the benefit of the monsoon and the sown area has increased. So 140 million farmers will benefit from this increase in subsidy, to ensure that the forthcoming crop shouldn’t face fertiliser shortages

2.15 pm

Equity infusion in infra-debt financing

Infusion of equity to the extent of Rs 6,000 crore to the National Investment and Infrastructure Fund (NIIF) debt platform. NIIF attracts a lot of sovereign funding for investment in infrastructure activities. Now, it also has a debt platform and by 2025, it has to provide funding of Rs 1.1 lakh crore for the NIP. We are now giving Rs 6,000 crore of equity to the debt platform of NIIF, where private equity participation will also come in.

NIIF has also invested Rs 2,000 crore into the debt platform.

2.10 pm

Income tax relief for developers and home buyers

There is quite a lot of inventory in the real estate sector. At the moment, the differential between the circle rate and the agreement value – you get 10% relief. We have decided to increase the differential from 10% to 20% till June 30, 2021 for only primary sales.

This is for residential units of value upto Rs 2 crore.

The Section 43 CA of the Income Tax Act, presently allows for a 10% differential between the circle rate and the sale agreement value.

We expect a lot of clearance of inventory and people will be able to pay less as the differential gap will be reduced. This will help the middle class which wants to buy when the housing sector is sitting on inventories, she says.  The necessary amendment to the income tax act will be made in due course, she adds.

The Section 43 CA of the Income Tax Act, presently allows for a 10% differential between the circle rate and the sale agreement value.

2.05 pm

Relaxation of Earnest Money Deposit

To improve ease of doing business and give relief to contractors whose money is locked up and this will also have a bearing on cost of bank guarantees, performance security on contracts is being reduced to 3% from 5% to 10%.

Public sector companies will also be asked to do this and State governments will also be encouraged to do this, says Ms. Sitharaman.

So earnest money deposit for tenders will be replaced by a bid security declaration for a period of 1 year, so that the burden on contractors will be reduced and there will be greater flexibility for them to get into construction and infrastructure, she says.

This will be valid till December 31, 2021, and will reduce the amount of capital that gets locked up, along with bank guarantee costs.

2.00 pm

PM Awas Yojana (urban)

The Finance Ministry announces Rs. 18,000 crore additional outlay for PMAY-urban. This is over and above the Rs. 8,000 crore announced in the Budget.

She hopes this will help 12 lakh houses to be grounded and 18 lakh houses can be completed.

She also says additional jobs of 78 lakh will be created, besides increasing the demand of cement and steel, thus having a multiplying effect.

1.55 pm

PLI in 10 manufacturing sectors

Ms. Sitharaman speaks on Wednesday’s announcement on Production-Linked Incentive (PLI) scheme for ten key sectors. She recalls a similar scheme was announced earlier for three sectors earlier.

“So now, 13 sectors are part of the PLI scheme. It covers sunrise sectors, labour-intensive sectors and those sectors through which India hopes to link to the global value chain,” she says.

I hope this will give a big boost to the Indian economy and domestic employment, she adds.

1.45 pm

ECLGS 2.0

Emergency Credit Liquidity Guarantee scheme has been further extended to March 31, 2021. It is a non-collateral fund based-working capital term loan.

Government is launching a credit guarantee scheme for 26 stressed sectors as identified by the Kamath Committee plus health care sector. This will have one year moratorium and four years of repayment.

So 26 stressed sectors have been identified, and for those and the health sector, with credit outstanding of Rs 50 crore to Rs 500 crore, this scheme would be extended. Entities upto 30 days past due as of February 29, 2020, will get an additional credit for upto five years with a moratorium of one year on principal repayment.

1.35 pm

ANBA 3.0

There are 12 things that we are announcing. You may refer to it as atma nirbhar 3.0, says Finance Minister Nirmala Sitharaman.

She announces Atmanirbhar Bharat Rozgar Yojana to incentivise creation of new employment.

As per the scheme, which comes to effect retrospectively from Oct 1, 2020,  every EPFO-registered establishment, if they take new employees who were to be covered by EPF or those who lost jobs between March 1 and September 30, 2020, will benefit. They will be covered for the next two years.

As per the finance ministry presentation, this benefit will apply to all such ‘new employees’ earning monthly wages less than Rs 15,000.

Establishments registered under the EPFO have to add at least two more employees for firms with less than 50 employees and minimum five employees for firms with over 50 employees. This hiring can happen between October 1, 2020 to June 30, 2021, and will be valid for two years, she adds.

Central government will bear the 24% EPF contribution if the number of employees are less than 1000. In case of employees over 1000, 12% employee contribution will be borne by the government for the next two years.

This benefit will get credited upfront in Aadhaar seeded EPF account of eligible new employees

1.30 pm

ANBA 2.0

Of the announcements made on October 12 as Atma Nirbhar Bharat Abhiyan 2.0 package,  LTC vouchers scheme has been launched, and festive advance scheme unveiled with SBI Utsav cards being distributed.

11 States have been sanctioned Rs 3,621 crore as interest free loan towards capital expenditure. This doesn’t include Rs 450 crore for Bihar that was going through elections at the time.

Rs 25,000 crore has been sanctioned for additional capital expenditure to the Ministry of Defence and Ministry of Road Transport and Highways.

1.25 pm

Emergency Credit Liquidity Guarantee scheme

The Rs 3 lakh crore Emergency Credit Liquidity Guarantee scheme, of which Rs 2.05 lakh crore has been sanctioned to about 61 lakh borrowers that included MSMEs, professionals and others. Rs 1.52 lakh crore has been disbursed.

We had also announced a partial credit guarantee scheme through public sector banks. They have bought portfolios worth Rs 26,889 crore.

Rs 7,227 crore has been disbursed to housing finance companies and non-banking finance companies under a special liquidity scheme.

Rs 31,136 crore has been disbursed to 11 States to infuse liquidity in State discoms.

Total loans of Rs 1,18,273 crore have been sanctioned to 17 States and UTs as part of the liquidity injection scheme for Power discoms.

1.20 pm

ANBA 1.0

Nirmala Sitharaman highlights some of the previous announcements she made under Atma Nirbhar Bharat Abhiyan or Self Reliant India. “I call them ANBA 1.0 and ANBA 2.0,”  she says.

I am now giving you the progress on ANBA 1.0 that directly affect the poor. The One Nation One Ration card – interstate portability has been achieved in 28 States and union territories.

As many as 68.6 crore beneficiaries are now lifting their foodgrains from any stores of their choice in any of those 28 States and UTs, from September 1. About 1.5 crore monthly transactions are happening using these [ration cards]. This was a progressive step to boost food security.

Under the PM Street Vendors Scheme, 13.78 lakh loans cleared worth Rs 1373.33 crore cleared to various states and UTs, she says.

Credit boost has been achieved for 2.5 crore farmers through the Kisan Credit card. Total amount sanctioned and disbursed in two phases was Rs 1,43, 262 crore. So farmers were covered for their immediate agricultural activity based requirements.

1.15 pm

‘Correction is happening in the positive direction for India’

Many economists have been writing and noticing that this growth is being energised by the unrelenting reform pitch by the government.

Moody’s today has come out with numbers for the Indian economy from an earlier 9.6% negative growth, which they have now reassessed to 8.9% negative growth.

Even these assessments by agencies indicate that a correction is happening in the positive direction for India.

1.10 pm

‘We could be back in positive terrain in Q3 itself’

GST collections had touched Rs. 1.05 lakh crore, up 10% year on year, says the Finance Minister.

Bank credit growth improved 5.1% as on October 23, 2020. Markets are on a record high. Net investments and FDI are positive, and the foreign exchange reserves are like never before at $560 billion.

The RBI’s latest monthly report predicts a strong return to proper growth of the Indian economy, and there could be strong growth in Q3 itself that could bring us to positive terrain.

The expectation earlier was that growth would be seen in fourth quarter, but the RBI feels it could happen as early as Q3.

1.00 pm

I would like to announce a few new measures that you may call the next step in the series of stimulus announcements that we have been making, says Ms. Sitharaman.

Active cases of COVID have declined from 10 lakh to 4.89 lakh and the case fatality rate has come down to 1.47%, she points out.

The economy – you are aware in the last 15 days, quite a few measures and indicators that show a recovery is clearly happening. It is just not pent-up demand but also a strong pitch for recovery.



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