Nirmala Sitharaman has released yet another Covid-19 relief package right before of Budget 2021-22. The main aim for this is job creation, to provide liquidity support to stressed sectors, and to step up investment in housing and infrastructure sectors. The Finance Ministry has also extended the deadline for the Emergency Credit Line Guarantee Scheme (ECLGS).
An additional Rs 65,000 crore is being provided as fertiliser subsidy due to the increased crop sown area. For stressed sectors, the government has launched a new and improved version of the ECLGS scheme to provide funding support. Companies that have loan dues up to 30 days (Special Mention Accounts or SMA 0) as on February 29, 2020 will be provided additional credit of 20 per cent outstanding under the scheme.
The Kamath Committee has identified 26 stressed sectors, including construction, trade, hotels, and transport. It was observed that corporate sector debt worth Rs 15.52 lakh crore had come under stress after the pandemic hit India, while another Rs 22.20 lakh crore was already under stress by then. This effectively means that Rs 37.72 lakh crore (72 per cent of the banking sector debt to industry) remains under stress.
Various measures have been taken under this scheme :-
- Atmanirbhar Bharat Rozgar Yojana: It provides subsidy for provident fund contribution for adding new employees to establishments registered with the Employees’ Provident Fund Organisation (EPFO)
- The organisations of up to 1000 employees would receive employee’s contribution (12% of wages) & employer’s contributions (12% of wages), totalling 24% of wages, for two years.
- The subsidy amount under the scheme will be credited upfront only in Aadhaar-seeded EPFO accounts (UAN) of new employees.
- The eligibility of the subsidy is specified i.e., establishments registered with EPFO will be eligible for the benefits if they add new employees compared to the reference base of employees as in September 2020.
- Establishments withup to 50 employees would have to add a minimum of two new employees.
- The organisations, withmore than 50 employees, would have to add at least five employees.
- Additional outlay of 10,000 Croreis being provided for PM Garib Kalyan Rozgar Yojana to provide rural employment.
Finance Minister has also announced schemes for housing, construction and infrastructure.
- An additional outlay of Rs 18,000 crore for the PM Awas Yojana (PMAY)- Urban. This would help 12 lakh houses to be grounded, and 18 lakh to be completed.
- A reduction in the earnest money deposit and performance deposit on government tenders.
- Rs 6,000 crore of equity in the National Investment and Infrastructure Fund (NIIF) to support debt financing totalling Rs 1.1 lakh crore by 2025.
These schemes are said to be remarkable and come as a relief for the people belonging to these industries. The government’s announcements focus on job creation, easing credit flow, but actual spending remains limited. Indian Economy has been slowed down due to COVID-19. Hence, schemes like these would prove to be beneficial.
