New Delhi: Prime Minister Narendra Modi has announced a massive economic package, which along with previous packages and RBI reprieves, will amount to Rs 20 lakh crore ($265 billion), the largest such package in Covid-hit developing countries. He stated that it will address issues pertaining to land, labor, liquidity and loss. The total economic package is approximately 10 per cent of India’s GDP.
According to the Prime Minister, the package will help India get to its ultimate goal of being “self-reliant”. “This package is for the farmers, for our middle class who honestly pay taxes and our industry who are determined to take India to heights”.
The economic package was released in two tranches by Finance Minister Nirmala Sitharaman on May 13 and 14.
In the first tranche, the Modi Government has come out with 15 new and some enhanced measures to revive businesses, and support workers via fiscal incentives and regulatory easing under the mega stimulus package. According to an expert analysis, the measures such as collateral free loan, subordinated debt, fund of funds for MSME, all involve support to be provided by banks and other institutions. Similarly, the Rs 90,000 crore liquidity to Discoms also involve state guaranteed loans that has to be paid with interest.
Sitharaman released the second tranche with a focus on migrant workers, street vendors and small farmers. She announced free food grain supply to all migrants who are non–card holders amounting to an expenditure of Rs 3,500 crore by the Centre for the next two months. She also announced that the Credit Linked Subsidy Scheme (CLSS) for middle income groups to buy affordable housing units will be extended till March 31, 2021.
More details of the economic package, based on PM Modi mandated theme of making India self-reliant will be released over the next few days.