Amidst rising matters about COVID-19, the Government of India has requested the citizens to fall back on Indian goods. Moreover, this can be seen that every country is removing its manufacturing units from China, the initiator of the virus. You must note that to the date Indians used to heavily reliant on Chinese people for electronic and medical equipment. However, habits have to change, and we Indians are trying to do the same.
Prime Minister Narendra Modi stated the Atmanirbhar Bharat Abhiyan with the package of Rs 20 lakh crore or 10% of India’s GDP in 2019-20 aimed towards achieving this mission. The main intention behind this initiative is to make India self-reliant.
Let us take a drive to the key features of this Atmanirbhar Abhiyan:
- Through this initiative, Prime Minister aims to make India confident. He aims at creating products within India and sells those. This will increase the self-dependency so that India would have the upper hand in deciding its own course. Other big and developed nations will not be able to utilize the loopholes and gain on that front.
- The Prime Minister has laid out a plan, where there will be a variety of provisions for the betterment of the society. There will be many opportunities for various sections of society.
- By this Government don’t want to isolate the country as such but to increase the self-confidence of the country and citizens.
- This will help the migrant workers, BPL cardholders, and aged people so that they need not suffer.
- There is an outline of collateral-free MSME loans.
- The Government is preparing to give Rs 20,000 crore to MSMEs. This immense amount will turn help to up to 2 lakh SMEs.
The Atmanirbhar Bharat Yojana aims to bring relief to different sectors that are affected by this pandemic. The package of Government aims to bring about fiscal relief that may be considered as 1.1% of GDP. They have also allowed states to increase borrowing to 0.50% of the State GDP. Thus, this package aims to bring new reforms in agricultural and public sector enterprises.
The complete size of the package under the first division is Rs.5.94lakh crore, which is around 2.97% of the GDP. The benefits under the first division of the Atmanirbhar Abhiyan Package Include:
- MSMEs will be eligible to arrange collateral-free loans. Further, The administration will give a percentage of credit guarantee to banks and other financial institutions.
- There will be a separate outline about subordinated debt, that will be providing equity to MSMEs who are bearing.
- The Government will be implanting equity into debt-ridden MSMEs. The council will likely provide funds for the amount of Rs. 10 crores.
- There will be support in EPF by the Government that will be amounting to Rs.2500 crore.
- Moreover, the contribution of employee and employer to EPF has been reduced for three months.
- There is a specific liquidity treatment for NBFCs, HFCs, MFIs, securities issued by them.
- NBFCs will get partial credit guarantee and remarkable deductions in TDS too.
The second division of the Atmanirbhar Package for self-reliant India:
- The extent of this package is Rs 3.10 lakh crore. This amounts to 1.55 % of GDP.
- The second division of the Atmanirbhar Package is for self-reliant India.
- The extent of this package is Rs 3.10 lakh crore. This amounts to 1.55 % of GDP. This package comprises the supply of food grains for free to the migrant workers. The amount for such supplies is Rs 3,500 crore.
- Those who are the member of Mudra-Shishu loans will get a subsidy of Rs 1,500 crore.
- There will be a unique liquidity scheme that will contribute Rs 10,000 capital to almost 50,00,000 street merchants. The value of such an amount is Rs. 5000 crores.
- Middle-income groups will get a credit-linked subsidy.
- Farmworkers also stand to get Rs 6,000 crore. This will be a fraction of the CAMPA reserves.
- All the farmers will get an extra fund for working capital funding through Nabard. Rs 30,000 crore assist in this sector.
- There will be a stipulation of concessional credit to 2.5 crore farmers within their Kisan Credit cards. This will be around Rs 2 lakh crore.
The third division of the Atmanirbhar Package for self-reliant India:
- This will include financing ease for Agricultural infrastructural projects and amounts to Rs 1 lakh crore.
- There is a different scheme for Small Food Businesses that amounts to Rs 10,000 crore.
- There is a separate system aimed towards funding for seamen through PM Matsya Sampada Yojana. This will be around Rs 20,000 crore.
- There is the facility for an “Animal Husbandry Infrastructure Development Fund” as well. This will total to an amount of Rs 15,000 crore.
- The state is also promoting herb cultivation of the amount of Rs. 4000 crores.
Measures by Reserve Bank of India:
The Reserve Bank of India (“RBI“) will perform the following measures to help in enhancing the cash liquidity in the market:
- The modification will be made in the Cash Reserve Ratio (CRR), which will result in liquidity improvement of INR 1,37,000 crores.
- Targeted Long Term Repo Operations (“TLTRO’s“) of INR 1,00,050 crores will be provided for further deployment in investment-grade corporate bonds, commercial paper, and non-convertible debentures.
- TLTRO of Rs.50,000 crore will be granted for financing in investment-grade bonds, commercial paper, and non-convertible debentures of NBFCs, and MFIs.
- Banks’ limit for acquiring late, under the marginal standing facility (“MSF“), will be developed to allow the banking system to avail an additional INR 1,37,000 crores of liquidity at the contracted MSF rate.
- Specific refinance facilities to be presented for NABARD, SIDBI and the NHB for a total amount of INR 50,000 crores at the policy repo rate.
- Extraordinary liquidity ease of INR 50,000 crores to be prepared for mutual funds to lighten strengthened liquidity requirements.
- The moratorium of three months to be granted on the installment and payment of the interest on working capital facilities concerning all term loans.
- Working Capital Financing will be reduced by decreasing margins.
- For credits by NBFCs to commercial real estate sector, extra time of one year has been granted for an extension of the date for commencement for business operations.
The Government has determined to clear the tax refunds so that the citizens can have more cash liquidity in hand and have also implemented extended timelines for some filings and other reliefs. The reliefs implemented are as follows:
- The unfinished income tax refunds, up to INR 5 lakhs have been declared and the last date for filing income tax return for Financial Year 18-19 has been extended to June 30, 2020.
- Moreover, the due date for all the income tax returns for Financial Year 2019-20 will be extended from July 31, 2020, & October 31, 2020, to November 30, 2020, and the date of filing of Tax audit from September 30, 2020, to October 31, 2020.
- The filing of GST returns has also been extended to the end of June 2020.
- Freewheeling withdrawal of cash without any limit in the number of transactions will be admitted from ATMs of any bank for three months.
- Installments of Motor Vehicle and Health Insurance Policies are also approved before May 15, 2020.
- All indeterminate refunds to beneficent trusts and non-corporate business professionals including proprietorship, partnership, LLP, and Cooperatives, shall be issued instantly.
- Date of evaluations getting suspended on September 30, 2020, will be reached to December 31, 2020, and those getting suspended on March 31, 2021, will be extended to September 30, 2021.
The Government of India earmarked total spending of Rs.20 lakh crore under “Atma Nirbhar Bharat Abhiyan or Self-reliant India Mission” to fight against the COVID-19 pandemic. This is the largest amongst the several economic stimulus packages announced by different nations across the globe. The earmarked fund was about 10% of India’s GDP in 2019-20. By this move, India would rank behind the different nations like- Japan, the US, Sweden, Australia, and Germany.