Announcement of stimulus package after the second wave of COVID-19 epidemic
Recently, after the second wave of COVID pandemic, an incentive amount of ₹6.28 lakh crore was announced by the Finance Minister.
A stimulus package is a package of tax exemptions and incentives used by the governments of different countries to stimulate the economy and save their country from financial crisis.
The measures announced by the finance minister are aimed at preparing health systems for emergency response and boosting growth and employment. The announced measures are divided into 3 broad categories.
Economic relief from the pandemic
- A loan guarantee scheme of Rs10 lakh crore has been approved for the COVID affected areas. This includes Rs 50, 000 crore for the health sector and Rs60,000 crore for other sectors, including tourism.
- The ‘Emergency Credit Line Guarantee Scheme’ (ECLGS) has been expanded with an additional Rs5 lakh crore.
- National Credit Guarantee for collateral free automatic loans in the form of Guaranteed Emergency Credit Line (GECL) facility to eligible Micro Small and Medium Enterprises (MSMEs) and interested Mudra (MUDRA) borrowers, under the ‘Emergency Credit Line Guarantee Scheme’ (ECLGS). 100% guarantee coverage is provided by Trustee Company Limited (NCCTC).
- Under the Pradhan Mantri Garib Kalyan Yojana, free food grains will be allotted from May to November,
- Self-reliant India Employment Scheme has been extended from 30 June 2021 to 31 March This scheme was launched in October, 2020.
- It encourages employers to create new jobs and restore employment in the event of job loss.
- One month free tourist visa will be given to five lakh tourists.
Strengthening Public Health
23,220 crore will be allocated for short-term emergency preparedness and pediatric care/paediatric beds with more focus on children’s health.
Incentives for Growth and Employment
- Climate resilient bio-fortified crop varieties with high nutrients like Protein, Iron, Zinc, Vitamin-A etc. were released.
- A revival package of Rs.45crore has been announced for North Eastern Regional Agricultural Marketing Corporation for augmentation of agriculture, procurement, processing and marketing infrastructure.
- Under Bharat-Net, Rs 19,041 crore will be allocated for broadband in each village through public-private partnership (PPP) model.
- The period of Production Linked Incentive (PLI) scheme for large scale electronics manufacturing has been extended by one year i.e. up to the year 2025-26.
- The PLI scheme provides an incentive of 6% to 4% on incremental sales of goods under the target segments Made in India for a period of five years.
- The incentives are applicable with effect from 08.2020 with the base year 2019-20.
- An incentive of Rs 33,000 crore is being given for project exports through the National Export Insurance Account (NEIA).
- National Export Insurance Account (NEIA) provides adequate credit insurance cover to long and medium term exporters to protect them from the risks of overseas and related buyer/bank.
- Rs 03 lakh crore (target to provide assistance for installation of 25 crore smart meters, 10,000 feeders etc.) will be allocated for Reform-Based Result-Linked Power Distribution Scheme.
- A new streamlined process for public-private partnership (PPP) projects and asset monetization will be introduced to facilitate the capacity of the private sector in financing construction and infrastructure management.
Source – PIB
