My views on the 20 lakh crore stimulus package given by the Government Of India in response to Covid-19 pandemic.

1. Decoding 20 Lakh
Covid-19 Stimulus
Package
By: Mohit Chavan

2. Overview of
Stimulus
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3. Tranche
Primary focus on MSME’s
1st

4. 4

5. MSME’s
╸ The first tranche of an economic relief plan whose primary focus was to
alleviate the sweeping distress in the Micro, Small and Medium Enterprises
sector that lies at the heart of the industrial ecosystem and employs an
estimated 11 crore persons, including much of the country’s migrant workforce.
╸ While the 16 specific announcements announced in the first tranche cut across
sectors that range from MSME and Non Banking Finance Companies (NBFCs)
to real estate and power distribution and the salaried, the overarching theme
was that of infusing liquidity. And engineering a pass-through effect that
ultimately puts more disposable funds in the hands of both entrepreneurs and
employees.
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6. Tranche
Cushion the blow of Covid-19 on “Self-reliant India Mission”
2nd

7. 7

8. Migrant Worker’s
╸ The second tranche of the economic stimulus package as part of ‘Self-reliant
India Mission’ to cushion the impact of Covid-19, Union Finance Minister
Nirmala Sitharaman Thursday announced three measures for the distressed
migrant workers.
╸ Firstly, migrant workers, who are neither National Food Security Act (NFSA) or
State Card beneficiaries in the state they are stationed, will be provided 5 kg of
grains per person and 1 kg Chana per family per month free for two months.
╸ The ‘One Nation One Ration card’ scheme under which migrants will be
enabled to access Public Distribution System from any Fair Price Shop in the
country by March 2021. This is part of the PM’s Technology-Driven System
Reforms.
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9. Tranche
11 measures for the agricultural sector
3rd

10. 10

11. Agricultural Sector
╸ Measures for the Agri-sector as part of the third tranche of the government’s
Rs 20 lakh crore Covid-19 relief package. However, most of these measures
are either in place already or the government has been discussing previously.
╸ Sitharaman also announced the setting up of a Rs 1 lakh crore Agri
Infrastructure Fund; the formalization of Micro Food Enterprises, with an outlay
of Rs 10,000 crore; a vaccination drive against food and mouth disease among
cattle; extension of the Operation Greens from tomatoes, onion and potatoes
to all fruits and vegetables; help for fishermen through the Pradhan Mantri
Matsya Sampada Yojana; a Rs 15,000-crore Animal Husbandry Infrastructure
Development Fund; Rs 4,000 crore for promotion of herbal cultivation; and a
Rs 500 crore scheme to promote beekeeping.
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12. Tranche
Measures for eight sectors and Atmanirbhar Bharat Abhiyan
4th –
5th

13. 13

14. Atmanirbhar
Bharat and 8 other
sectors
╸ These include: commercial coal mining; coal gasification projects;
building a hub for aircraft maintenance, repair and overhaul (MRO);
privatization of airports, and optimization of Indian airspace.
╸ The renewed push for commercial mining is a proposal over two years
old. A way to auction coal mines/blocks for sale of coal under the
provisions of the Coal Mines (Special Provisions) Act, 2015, and the
Mines and Minerals (Development and Regulation) Act, 1957, it was
approved by the government in early 2018 and an order was issued on
February 27, 2018. The Coal Ministry said it had identified “15 large coal
blocks” for the pilot round of bidding in December that year.
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15. “╸ In order to prove the resolve of the
self-reliant India, land, labor, liquidity
and laws, all have been emphasized
in this package,” and added that,
“We have announced several
reforms in this regard and shall
continue with the same today.”
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16. Ultimate
question
What impact did this 10% GDP
stimulus package bring in for
everybody?
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17. Reality?
╸ The truth is that the entire package is designed not to help workers and the poor but to push forward
the government agenda of pro-corporate reforms. This was encapsulated by the Prime Minister's
coinage of the four Ls: labor, land, laws and liquidity. The lockdown is being used to promote further
concentration in the control over the nation's economic resources and to reverse basic rights of the
working people. Nine state governments have diluted labor laws, including the extension of working
hours to 12 by some. Three governments led by the BJP have suspended many labor laws for three
years, basically turning workers into slaves. The dilution of the framework of environmental impact
assessments in the new draft posted on the MOEFCC website, as well as the liberalization of
regulations related to mining, presages a new phase of forcible acquisition of land, including forest
land. The so-called reforms in the agricultural sector will make farmers more vulnerable to the
manipulations of prices by big agribusinesses while weakening the system of government
procurement at a guaranteed MSP. It is a strange definition of self-reliance that the government is
liberalizing all sectors to allow foreign investment, putting up the public sector for sale, smashing the
core of India's self-reliance.
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The package is a hoax. Soon enough, the workers and
kisans of India will, like the child in the fable, exclaim
that the emperor has no clothes.

18. 18
New Stimulus

19. Issues Addressed
Part-1
╸ First, finance minister Sitharaman announced a new 'Atmanirbhar Bharat Rozgar Yojana'
to incentivize job creation. Beneficiaries under the new scheme include any new
employee joining employment in EPFO registered establishments on monthly wages
less than Rs 15,000. If new employees of requisite number are recruited from October 1,
2020 to June 30, 2021, the establishments will be covered for next two years.
╸ Second, Emergency Credit line Guarantee Scheme (ECLGS) has been extended till
March 31, 2021. Also, tenor of credit under ECLGS 2.0 to be five years, including one year
moratorium on principal repayment.
╸ Third, Rs 1.46 lakh crore boost manufacturing sector with production-linked incentive for
10 sectors such as mobile manufacturing, electronic components and pharma. This is
expected to give a significant boost to economic growth and domestic employment.
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20. Issues Addressed
Part-2
╸ Fourth, Rs 18,000 crore additional outlay for PM Awaas Yojana (PMAY-Urban). This will
help 12 lakh houses to be grounded and 18 lakhs to be completed.
╸ Fifth, support for construction and infrastructure - relaxation of earnest money deposit
(EMD) and performance security on government tenders. Performance security on
contracts to be reduced to 3% instead of 5 to 10%. Also, END will not be required for
tenders.
╸ Sixth, demand booster for residential real estate sector with income tax relief for
developers and home buyers.
╸ Seventh, Rs 1.10 lakh crore platform for infra debt financing with Rs 6,000 crore equity
infusion in NIIF debt platform.
╸ Eighth, extending support to the agriculture sector, Rs 65,000 crore has been provided
for subsidized fertilizers.
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21. Issues Addressed
Part-3
╸ Ninth, additional outlay of Rs 10,000 crore under PM Garib Kalyan Rozgar
Yojana will be provided in the current financial year. It can be used for
schemes including MGNREGA and PMGSY.
╸ Tenth, Rs 3,000 crore will be released to EXIM bank for promotion of project
exports through lines of credit.
╸ Eleventh, Rs 10,200 crore additional budget outlay will be provided towards
capital and industrial expenditure.
╸ Twelfth, Rs 900 crore provided for Covid Suraksha Mission for research and
development of Indian vaccine to department of biotechnology.
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