Dr. Niranjan Hiranandani
The Aatmanirbhar Bharat Abhiyaan 3.0 put forth at a crucial and critical COVID recovery phase took care of many loose threads to tighten the economic fabric of the country. Yes, there are strong economic indicators to show that India is on a resilient recovery path, the GST collection has risen by 10 percent Y-O-Y, the FDI inflows have grown 13 percent Y-O-Y, the RBI has predicted Indian economy returning to positive growth in Q3, 2020-21 instead of Q4, and the international rating agency, Moody’s revised GDP forecast of 2020 to -8.9 percent from -9.6 percent are some of them.
The measures are taken at strategic junctures by the government and the Reserve Bank of India (RBI) to handhold the industry captains and the marginalized poor including the migrant workers, to incentivize exporters and manufacturers including MSMEs to small farmers and daily-wages workers, to help salaried class, hawkers, and distresses sectors have been successful at various levels showing the remarkable result as told by FM mentioning the outcome of Aatmanirbhar Bharat 1.0 & 2.0.
Going a step further, the government has come out with a Production Linked Incentive scheme for 10 key sectors that include telecom, automobiles, and pharma. The total outlay for these kinds of incentives will be around Rs 2 lakh crore for the five –year period. The scheme is aimed at encouraging domestic manufacturing, generating employment, and reducing imports in line with PM’s vision of Aatmanirbharta or self-reliance.
The extension of the viability gap funding scheme to the social infrastructure sector along with the existing projects concerning only the economic infrastructure sector by the government will definitely reap certain benefits. The scheme is supposed to provide encouragement to the critical sunrise sectors linking them to the global value chain and create jobs.
The announcement of Aatmanirbhar Bharat 3.0 at this juncture will send out a strong signal of commitment from the government to steer the economy not only to the pre-COVID level but surpass it by many notches.
The announcement will make the road to recovery post-pandemic stronger and facilitate and incentivize job creation, and provide much relief and impetus to the housing and infrastructure sector.
The measures announced by FM — about the tax relief for developers and first-time homebuyers for houses up to Rs 2 crore till June 30, 2021. And the differential between circle rate and agreement value in real estate income tax that has been increased to 20 percent to boost housing sales– are a kind of relief the infra and housing industries were looking forward to. It would certainly push the sluggish demand in the housing sector and will also address the issue of unsold inventory in the sector. The tax relief will take some pressure off the end-user and also of the developers.
To infuse Rs 6,000 crore of equity in the debt platform of National Infrastructure Investment Fund (NIIF) will help NIIF raise Rs 1.1 lakh crore by 2025 for financing infrastructure projects. NIIF will also raise equity from private investors, the well-timed announcement will also push the infrastructure sector out of the doldrums.
The very thoughtful decision of the FM to extend the Emergency Credit Line Guarantee Scheme (ECLGS) for MSMEs, businesses, MUDRA borrowers and individuals (loans for business purposes), till March 31, 2021 will make things easier for the bottom of the pyramid people. Credit Guarantee Support Scheme for the healthcare sector and other 26 stressed sectors affected by the pandemic will help revive these industries and ensure their survival. By providing fertilizer subsidy of Rs 65,000 crore to farmers and Rs 900 crore for the research & development of COVID vaccine, the government has once again proved that it does not let go of the focus on the core issues while taking care of the rest of the problem.
No wonder, the total stimulus provided by the Government and RBI is 15 percent of the GDP which is been the demand and suggestion right from the beginning. So far the government has announced Rs. 29.87 lakh crore stimulus packages in 7 installments since the COVID lockdown. And I believe that the rest will be taken care of by the people of this country who have shown tremendous resilience and faith in the system at this time of crisis.
The author is the president of the national industry body, ASSOCHAM