Atmanirbhar Bharat 3.0

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Context: Government has announced Atma Nirbhar Bharat Abhiyan 3.0, a fiscal stimulus package to boost demand and help the economy to recover from the slowdown. 

Relevance:
Prelims: About Atma Nirbhar Bharat Abhiyan
Mains: GS III: Features and significance of fiscal stimulus package 

 What is Atma Nirbhar Bharat Abhiyan?
  • Atmanirbhar Bharat Abhiyan (Self-reliant India Mission) is a campaign launched by the Central Government of India which included Rs 20 lakh crore economic stimulus package and a number of reform proposals.
  • As part of the relief measures in the aftermath of COVID-19, the Government announced a special economic package and gave a clarion call for “Atmanirbhar Bharat” or “Self-reliant India”.
  • This package totals Rs 20 lakh crore, including the government’s recent announcements on supporting key sectors and measures by the Reserve Bank of India, which is equivalent to almost 10% of India’s GDP.
  • The meaning of the term ‘Atmanirbhar Bharat’ is self-reliant India.
  • The five pillars of ‘Atmanirbhar Bharat’ are stated as:
    1. Economy
    2. Infrastructure
    3. Technology-driven systems
    4. Vibrant demography, and
    5. Demand.
  • The government announced it in different tranches.

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Various tranches of the economic relief package 
  • The First Tranche
    The First Tranche of Rs. 5,94,550 crore package focusing mainly on MSME sector, Provident Fund relief, NBFCs, TDS/TCS rates, DISCOMs, RERA companies, and others:
    • Relief in Provident Fund
      • Statutory Provident Fund Contribution by employers has been reduced to 10% (earlier 12%) for 3 months by way of Rs. 6,750 crore liquidity relief.
      • The Finance Minister also announced Rs. 2,500 liquidity support to businesses and workers for the next 3 months.
    • Relief in MSME Sectors
      • Rs. 50,000 crore equity infusion for MSMEs through Fund of Funds (FoFs)
      • Rs. 20,000 crore Subordinate Debts
      • Rs. 3 lack crores Collateral free Loans for MSMEs were announced under this package
      • The definition of MSMEs has been revised in order to include more businesses that will be benefitted from this package
    • Relief in NBFC’s
      • Rs. 30,000 crore liquidity boosts to strengthen the collapsed financials the Finance Minister announced that are collapsed due to the COVID-19 pandemic
      • Rs. 45,000 crores Partial Credit Guarantee Scheme 2.0
    • Relief in Other Sectors
      • Rs. 90,000 crore liquidity is provided to DISCOM (Power Distribution Companies) to reduce the piled up debts
      • Rs. 50,000 crore relief fund provided to reduce TDS and TCS rates by 25% for the payments other than salaries
      • RERA registered projects registration and completion date extended for a period of 6 months which can be further extended for up to 3 months by the Regulatory Authorities
      • To promote local companies, the government has decided to disapprove global tenders up to Rs. 200 crore
      • Due dates of statutory payments and filing of tax returns for the Financial Year 2019-2020 have also been extended to 30th November 2020 (for income tax returns) and to 31st October 2020 (for tax audit cases)
  • The Second Tranche
    The Second Tranche of Rs. 3,10,000 crore package aiming to cater to farmers and migrant workers:
    • The introduction of ‘one nation one ration card’ under this tranche is going to allow every migrant worker to buy ration from anywhere in the country.
    • Food and Shelter facilities to migrant workers from the disaster response fund worth Rs. 11,000 crore was allowed to the state governments by the central government.
    • To enable institutional credit at a concessional rate for farmers, fishermen, and animal husbandry farmers, the Finance Minister allocated Rs. 2 lakh crore through Kisan credit cards.
    • 10,000 working capital will be provided initially to all the street vendors who are around 50 lakh in numbers, making it a special credit of Rs. 5,000 crore.
  • The Third Tranche
    The Third Tranche of Rs. 1,50,000 crore package focusing on agriculture, dairy, and its related sectors:
    • Under Pradhan Mantri Matsya Yojana, Rs. 20,000 will be provided to each fisherman and Rs. 10,000 crore strengthen micro food enterprises.
    • To develop farm-gate infrastructure considering set up for cold chains and post-harvest management infrastructure, Rs. 1,00,000 crore were allocated.
    • 500 crore allocated for bee-keeping infrastructure development.
    • 15,000 crore for the Animal Husbandry Infrastructure Development fund was raised.
    • 4,000 crore were allocated for herbal agricultural produce.
  • The Forth & Fifth Tranche
    The Forth and Fifth Tranches of Rs. 48,100 crore catering reforms for coal, minerals, air space management, defence production, MRO, DISCOMs in UTs, and atomic energy:
    • 40,000 crore was additionally allocated for the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) to increase job creation. It would be worth to notice that earlier in the budget this year, Rs. 61,000 crores was already allocated to this scheme.
    • Setting up of a new Public Sector Enterprises Policy to enable consolidation of PSU firms in strategic sectors.
    • Suspension of the initiation of fresh insolvency proceedings up to one year to help companies impacted by COVID-19.
    • Simplification of the utilization of Indian air space to reduce air travel costs.
    • Commercialization of coal industry and privatization of discoms in metros for smooth-running of their functions.

 

Highlights of Atma Nirbhar Bharat Abhiyan 3.0

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The Finance Minister announced 12 measures under Atma Nirbhar Bharat Abhiyan 3.0.It includes:

  1. Atmanirbhar Bharat Rozgar Yojana:
    • Central Govt. to provide subsidy for two years in respect of new eligible employees engaged on or after 01.10.2020 at the following scale
      • Establishments employing up to 1000 employees Employee's contributions (12% of Wages) & Employer's contributions (12% of wages) totalling 24% of wages
      • Establishments employing more than 1000 employees Only Employee's EPF contributions (12% of EPF wages)
    • The subsidy support to get credited upfront in Aadhaar seeded EPFO Account (UAN) of eligible new employee 
  2. Emergency Credit Line Guarantee Scheme (ECLGS) 2.0:
    • Emergency Credit Line Guarantee Scheme (ECLGS) 2.0 is being launched for the Healthcare sector and 26 stressed sectors (as identified by the Kamath Committee) with credit outstanding of above Rs. 50 crore and up to Rs. 500 crore as on 29th February 2020 stressed due to Covid-19, among other criteria.
    • Entities will get additional credit up to 20% of outstanding credit with a tenor of five years, including a 1-year moratorium on principal repayment.
    • This scheme will be available till 31st March 2021.
  3. Atmanirbhar Manufacturing Production-Linked Incentives for 10 champion sectors:
    • Rs 1.46 lakh crore boost for Aatmanirbhar ManufacturingProduction-linked incentives for 10 Champion Sectors 
    • Government of India has already approved PLI schemes for 3 sectors at a cost of Rs 51,355 crore as below: 
      • Mobile Manufacturing and specified electronics components at a cost of Rs 40,995 crore; 
      • Critical Key Starting Materials (KSM), Drug intermediates and Active Pharmaceuticals Ingredients (API) at a cost of Rs 6,940 crore 
      • Manufacturing of Medical Devices at a cost of Rs Rs. 3,420 crore. 
    • 10 more Champion Sectors will now be covered under the Production Linked Incentives Scheme to boost the competitiveness of domestic manufacturing. This is expected to give a significant boost to Economic Growth and domestic employment 
  4. Additional Outlay for PM Awas Yojana – Urban:
    • Rs 18,000 crores additional outlay for PM Awaas Yojana (PMAY) -Urban 
    • A number of measures have been taken in the past several months for revival of the Housing and Real Estate Sector.
    • These measures have contributed to a fair recovery in this sector. (SWAMIH– 135 projects approved with an outlay of Rs.13,200 crore. This will result in the completion of 87,000 incomplete houses/Flats. 
    • However, there is a need for further measures to enable the sector to generate more employment 
    • Rs 18,000 crore will be provided over the Budget Estimates for 2020-21 for Prime Minister Awaas Yojana – Urban (PMAY-U) through additional allocation and Extra Budgetary Resources. 
    • This is over and above the Rs 8,000 crore already allotted this year. This will help 12 lakhs houses to be grounded and 18 lakh to be completed Expected additional jobs to 78 lakh people, Steel – 25 LMT, Cement -131 LMT 
  5. Demand booster for Residential Real Estate, Income Tax relief for Developers & Home Buyers:
    • Economic slowdown has led to a decline in prices of residential units
    • Presently Section 43CA of IT Act restricts differential between circle rate & agreement value @ 10% – Prices may actually be lower than this.
    • Decided to increase the differential from 10% to 20% (under section 43CA) for the period from the date of the announcement to 30th June 2021 for only primary sale of residential units of value up to Rs 2 crores.
    • 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.
    • The necessary amendment to IT Act would be proposed in due course.
    • This measure will reduce hardships faced by both home-buyers and developers and help in clearing the unsold inventory. 
  6. Support for construction and Infrastructure:
    • Performance security on contracts to be reduced to 3% instead of 5 to 10% 
    • Will be extended to ongoing contracts which are free of disputes
    • Will also be extended to Public Sector Enterprises.
    • States will be encouraged to adopt the same
    • Earnest Deposit Money (EMD) will not be required for tenders and will be replaced by Bid Security Declaration
    • Relaxations will be given till 31.12.2021 under General Financial Rules
    • Will give relief to contractors by reducing locking up of capital and cost of BG 
  7. Infrastructure Debt Financing:
    • The government will make Rs. 6,000 Crore equity investment in the debt platform of the National Investment and Infrastructure Fund (NIIF), which will help NIIF provide a debt of Rs. 1.1 Lakh Crore for infrastructure projects by 2025.
  8. Support for Agriculture:
    • There is an estimated increase in fertilizer usage of 17.8% over the actual usage in 2019-20 of 571 lakh metric tonnes. The increase is on account of favorable monsoons and the resultant increase in the sown area. 
    • Fertiliser consumption, which was 499 lakh MT in 2016-17, is expected to increase to 673 lakh MT in 2020-21. 
    • Increased supply of fertilizers at subsidized rates will help 140 million farmers. 
    • Rs 65,000 crore being provided to ensure adequate availability of fertilizers to farmers to enable timely availability in the upcoming crop season. 
  9. Boost for rural employment:
    • An additional outlay of Rs. 10,000 Crore is being provided for PM Garib Kalyan Rozgar Yojana to provide rural employment. This will help accelerate the rural economy.
  10. Boost for Project Exports:
    • Rs. 3,000 Crore boost is being provided to EXIM Bank for promoting project exports under Indian Development and Economic Assistance Scheme (IDEAS Scheme).
    • Under the IDEAS Scheme, most recipient countries get Indian firms executing projects such as railway lines, transmission lines, and so on.
  11. Capital and Industrial Stimulus:
    • Rs. 10,200 Crore additional budget stimulus is being provided for capital and industrial expenditure on domestic defense equipment, industrial infrastructure, and green energy.
  12. Research and Development grant for Covid-19 vaccine: 
    • Rs 900 crore will be given to the Department of Biotechnology to research and develop the vaccine of COVID-19.
Conclusion
  • The government by starting this campaign has led a real Swadeshi movement and revolutionize Indian products.
  • However, in the quest to attain a self-reliant India, it is necessary for the government to decentralize its policies, take decisions for the rural crowd and laborers, keep the poor and underprivileged at priority, make environmental-friendly policies that are rooted to make India a self-sufficient nation globally.
  • In history, when India believed within Gandhi’s model of self-reliance, wonders happened.
  • On the contrary today, an epidemic has violated our independence, but we all shall ‘be vocal for local’ and adapt to a new lifestyle of being mutually interdependent and become empowered.



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