Atmanirbhar Bharat package: A boon for the distressed
Khumanthem Premkumar Singh
As the world grapples with ideas to address the adverse impact of COVID-19 pandemic, Prime Minister Narendra Modi came out with a catchphrase - “Atmanirbhar Bharat”, and an economic package of 20 Lakh Crore Rupees. The special economic package focused on land, labour, liquidity and laws and seeks to benefit all sectors of the economy and all sections of the people, including labourers, farmers, honest tax payers, MSMEs and cottage industries.
Prime Minister Modi said that the goal of the country should be to become self-reliant since that was only way to overcome the challenges and make 21st century India’s century. He said, “India’s self-reliance will be based on five pillars — economy, infrastructure, technology driven system, vibrant demography and demand. When India speaks of self-reliance, it does not advocate for a self-centered system. In India’s self-reliance there is a concern for the whole world’s happiness, cooperation and peace,”
Following the announcement by the Prime Minister, Finance Minister Ms. Nirmala Sitharaman announced the details of the economic package. This economic package had a slew of measures impacting all sectors of the economy. Here we will note some key decisions.
To help the MSMEs with capital, it was announced that businesses will be provided with collateral free automatic loans of up to three lakh crore rupees. A fund of funds with a corpus of Rs 10,000 crore will be set up for MSMEs. Rs 50,000 crore is expected to be leveraged through this fund structure. A subordinate debt to support to stressed MSMEs which have Non-Performing Assets (NPAs).
Under the scheme, promoters of MSMEs will be given debt from banks, which will be infused into the MSMEs as equity. The government will facilitate Rs 20,000 crore of subordinate debt to MSMEs.
NBFCs, HFCs, MFIs are finding it difficult to raise money in debt markets. Under this scheme investment will be made in both primary and secondary market transactions in investment grade debt paper of NBFCs/HFCs/MFIs . It will supplement RBI/Government measures to augment liquidity. Under the PM Garib Kalyan Yojana, the government paid 12% of employer and 12% of employee contribution into the EPF accounts of eligible establishments. This is estimated to provide liquidity relief to businesses. A special scheme launched to facilitate easy access to credit for street vendors. Under this scheme, bank credit to be provided to each vendor for an initial working capital of up to Rs 10,000.
Payments due to MSMEs from the government and CPSEs was released and to protect Indian MSMEs from competition from foreign companies, global tenders of up to Rs 200 crore not to be allowed in government procurement tenders.
The rates of Tax Deduction at Source (TDS) for the non-salaried specified payments made to residents and Tax Collected at Source reduced by 25% from the existing rates. This is estimated to provide liquidity of Rs 50,000 crore.
Agriculture and Allied sectors
Farmers to be provided institutional credit facilities at concessional rates through Kisan Credit Cards. This scheme covers 2.5 crore farmers with concessional credit worth two lakh crore rupees.
A fund of one lakh crore rupees created for development of agriculture infrastructure projects at farm-gate and aggregation points (such as cooperative societies and Farmer Producer Organizations).
An additional fund of Rs 30,000 crore to be released as emergency working capital for farmers. This fund is disbursed through NABARD to Rural Cooperative Banks (RCBs) and Regional Rural Banks (RRBs) for meeting their crop loans requirements. This fund benefits three crore small and marginal farmers.
The Pradhan Mantri Matsya Sampada Yojana (PMMSY) was announced for integrated, sustainable, and inclusive development of marine and inland fisheries. Under this scheme, Rs 11,000 crore is to be spent on activities in Marine, Inland fisheries and Aquaculture and Rs 9,000 crore will be spent for developing infrastructure (such as fishing harbours, cold chain, markets).
An Animal Husbandry Infrastructure Development Fund of Rs 15,000 crore set up, with the aim of supporting private investment in dairy processing, value addition, and cattle feed infrastructure. Incentives will be given for establishing plants for export of niche dairy products.
The Atmanirbhar Bharat Abhiyan has acted as a social security net during these troubled times in India.
Since the announcement of the package, a visible change has been witnessed in many sectors, a smile on the lips of the farmers, a new revival in the business sector, a welcome relief to the distressed investors. And all this is apart from the huge direct benefit transfer and free food grains that is being distributed to the crores of poor countrymen under this package. Indeed, Atmanirbhar bharat has shown the country the way forward.
(This article was sent by PIB, Imphal)