What is Atmanirbhar Bharat 3.0 Scheme launched by Finance Minister Nirmala Sitharaman?
On 12 November 2020, Finance Minister Nirmala Sitharaman along with Minister of State for Finance and Corporate Affairs, Anurag Thakur launched Atmanirbhar Bharat 3.0 to boost Covid-hit economy. A total of 12 announcements were made by Finance Minister Nirmala Sitharaman in a press conference focussing on jobs creation and tax relief in housing.
Here are the highlights of the Atmanirbhar Bharat 3.0:
1. Boost for Employment- Atmanirbhar Bharat Rozgar Yojana
Finance Minister Nirmala Sitharaman launched a new scheme 'Atmanirbhar Bharat Rozgar Yojana' to incentivise the creation of new employment opportunities during the COVID-19 recovery phase.
1- The establishments which are registered with EPFO, if add new employees compared to reference base of employees as in September 2020 as under (a) minimum of two new employees if reference base is up to 50 employees or less; (b) minimum of five new employees if reference base is more than 50 employees.
2- The establishments which will be registering with EPFO after the commencement of the Scheme will get subsidy for all new employees. The scheme will be operational till June 30, 2021.
Who will be regarded as the new employees?
Any employee who joins EPFO registered establishments on monthly wages less than Rs. 15,000. Also, the employees with the said wages who lost their jobs during COVID-19 pandemic (1 January 2020 to 30 September 2020) and are employed on or after 1 October 2020, will be regarded as the new employees.
The Central Government will provide subsidy for two years w.r.t. new eligible employees at the below-mentioned scale:
(a) Establishments employing up to 1000 employees: Employee's contributions will be 12% of the wages and the Employer's contributions will also be 12% of the wages, totalling 24% of the wages.
(b) Establishments employing more than 1000 employees: Employee's EPF contributions will be 12% of EPF wages.
It is to be noted that the subsidy will be credited in Aadhaar seeded EPFO Account (UAN) of the eligible new employee.
Earlier, Prime Minister Rozgar Protsahan Yojana (PMRPY) which was implemented till 31.3.2019 to incentivize formulation and creation of new employment. Under the scheme, Rs. 8,300 crores has been given to 1,52,899 establishments covering 1,21,69,960 beneficiaries.
2. Launch of ECLGS 2.0
The Finance Minister launched ECLGS 2.0 for supporting stressed sectors and the tenor of additional credit under ECLGS 2.0 to be 5 years, including a one-year moratorium on principal repayment. The scheme will be available till March 31, 2021.
The version 2.0 of the scheme will provide much-needed relief to the stressed sectors by helping entities sustain employment, meet liabilities and will also benefit the MSME sector which provides goods and services to eligible entities.
The Scheme is to be utilized for 100% guaranteed collateral-free additional credit at capped interests rates to:
(a) Entities in 26 sectors identified by Kamath Committee, in addition to the health care sector with credit outstanding of above Rs. 50 crore and up to Rs. 500 crore as on 29 February 2020.
(b) Entities with outstanding up to Rs. 50 crore previously covered under the existing scheme.
(c) No upper ceiling on annual turnover.
(d) Additional credit up to 20% of outstanding as on 29 February 2020.
(e) Entities to be up to 30 days past due (SMA 0) as on 29 February 2020.
Rs. 3 lakh crore existing Emergency Credit Line Guarantee Scheme (ECLGS 1.0)
The Scheme was announced as part of the Aatmanirbhar Bharat Abhiyaan and is extended till 31 March 2021. The Scheme will be fully guaranteed and collateral-free.
An additional credit up to 20% of outstanding loans as on 29 February 2020 for entities with outstanding credit up to Rs. 50 crore as on 29 February 2020 and an annual turnover up to Rs. 250 crore, which was up to 60 days past due as on 29 February 2020
The eligible entities under this scheme are MSME units, business enterprises, individual loans for business purposes and MUDRA borrowers.
Scheme update as on 12 November 2020:
(a) Rs. 2.05 lakh crore sanctioned to 61 lakh borrowers (b) Rs. 1.52 lakh crore disbursal
3. Atmanirbhar Manufacturing Production-linked incentives for 10 Champion Sectors
Finance Minister has announced a boost of Rs. 1.46 lakh crores for Atmanirbhar Manufacturing Production-linked incentives for 10 Champion Sectors.
The Government of India has already approved PLI schemes for 3 sectors at a cost of Rs. 51,355 crores as mentioned below:
(a) Mobile manufacturing and specified electronics components at a cost of Rs. 40,995 crores
(b) Critical Key Starting Materials (KSM), Drug Intermediates and Active Pharmaceutical Ingredients (API) at a cost of Rs. 6,940 crores.
(c) Manufacturing of Medical Devices at a cost of Rs. 3,420 crores.
10 more Champion Sectors will now be covered under the Production Linked Incentives Scheme to boost the competitiveness of domestic manufacturing and is expected to give a significant boost to economic growth and domestic employment.
|Sector||Estimated expenditure on new PLIs (in crores)|
|Advance Cell Chemistry Battery||Rs. 18,100|
|Electronic or Technology Products||Rs. 5,000|
|Automobiles and Auto Components||Rs. 57,042|
|Pharmaceuticals Drugs||Rs. 15,000|
|Telecom and Networking Products||Rs. 12,195|
|Textile Products||Rs. 10,638|
|Food Products||Rs. 10, 900|
|High-Efficiency Solar PV Modules||Rs. 4,500|
|White Goods (Acs and LED)||Rs. 6,238|
|Speciality Steel||Rs. 6,322|
4. PM Awaas Yojana (PMAY)-Urban
Several measures have been taken in the past for the revival of the Housing and Real Estate sector and there's a need for further measures to enable the sector to generate more employment.
For this, an additional outlay of Rs. 18,000 crores will be provided for PM Awaas Yojana (PMAY)-Urban through additional allocation and Extra Budgetary Resources. This will help 12 lakh houses to be grounded and 18 lakh houses to be completed.
5. Support for Construction & Infrastructure
The performance security on contracts to be reduced to 3% instead of 5 to 10% and will be extended to ongoing contracts which are free of disputes and to Public Sector Enterprises. The States will be encouraged to adopt the same.
Earnest Money Deposit (EMD) will not be required for tenders and will be replaced by the Bid Security Declaration.
The relaxations will be given till 31 December 2021 under General Financial Rules and will provide relief to contractors by reducing locking up of capital and cost of BG.
6. Demand booster for Residential Real Estate Income Tax relief for Developers & Home Buyers
The economic slowdown due to COVID-19 has led to a decline in prices of residential units. The Finance Minister has announced to raise the differential from 10% to 20% (under section 43CA) for the period from the date of the announcement to 30 June 2021 for only primary sale of residential units of value up to Rs 2 crores. A consequential Relief up to 20% shall also be allowed to buyers of these units under section 56(2)(x) of IT Act for the said period.
Section 43CA of IT Act
Presently, it restricts differential between circle rate & agreement value at the rate of 10% - Prices may actually be lower than this.
7. Rs. 1.10 lakh crore Platform for Infra Debt Financing – Rs. 6000 crores Equity infusion in NIIF Debt Platform
The investments made by 3 NIIF funds in downstream funds, platforms and operating companies is Rs 19,676 crores. A debt platform has been set up by NIIF Strategic Opportunities Fund, comprising an NBFC Infra Debt Fund and an NBFC Infra Finance Company.
The debt platform has a loan book of Rs. 8,000 crores and a deal pipeline of Rs. 10,000 crores. NIIF AIFL and IFL will raise a debt of Rs. 95,000 crores from the market and will provide infra project financing of Rs. 110,000 crores by the year 2025.
The government will only invest in Rs. 6000 crores as equity and the remaining equity will be raised from private investors.
8. Support for Agriculture
An estimated increase in fertiliser usage of 17.8% over the actual usage in 2019-20 of 571 lakh metric tonnes has been noted. In 2016-17, the fertilizer consumption was 499 lakh metric tonnes which were expected to increase to 673 lakh metric tonnes in 2020-21.
In light of this, the government will provide Rs. 65,000 crores for subsidised fertilisers, helping 140 million farmers.
9. Enhanced outlays under PM Garib Kalyan Rozgar Yojana
An additional outlay of Rs. 10,000 crores will be provided for PM Garib Kalyan Rozgar Yojana in the current fiscal year to boost rural employment.
It is to be noted that the Scheme is already in progress in 116 Indian districts and Rs. 37,543 has already spent to date on PM Garib Kalyan Rozgar Yojana.
10. Boost for Project Exports
On behalf of the Government of India, Exim Bank has extended the Lines of Credit (LOC) to provide assistance to developing countries under IDEAS scheme. It also promotes Indian export by mandating recipient countries to import 75% value of the LOC.
It is to be noted that to date 811 export contracts, aggregating USD 10.50 bn are being financed under Lines of credit.
Rs. 3,000 crores will now be released to EXIM Bank for promotion of the project exports through Lines of Credit under IDEAS scheme.
11. Capital and Industrial Stimulus
An additional budget outlay of Rs. 10,200 crores will be provided towards Capital and Industrial expenditure.
12. Research and Development for COVID-19 Vaccine Development
Rs. 900 crores provided for COVID Suraksha Mission for Research and Development of Indian COVID-19 Vaccine to the Department of Biotechnology.
Additional Expenditure including Capital
|Housing for All - PMAY-U||Rs. 18,000|
|Boost for Rural Employment||Rs. 10,000|
|R&D Grant for Covid Suraksha- Indian vaccine development||Rs. 900|
|Industrial Infrastructure, Industrial Incentives and Domestic Defence
|Boost for Project Exports – Support for EXIM Bank||Rs. 3,000|
|Boost for Atmnanirbhar Manufacturing - Production Linked Incentives||Rs. 1,45,980|
|Support for Agriculture – Fertiliser Subsidy||Rs. 65,000|
|Boost for Infrastructure – equity infusion in NIIF Debt PF||Rs. 6,000|
|Atmanirbhar Bharat Rozgar Yojana (overall Rs 36,000 cr)||Rs. 6,000|
The amount is in crores in the above table.