Hello Aspirants!
We all know that the Covid-19 pandemic has severely hit the economy of our country. To boost the economy, Finance Minister Nirmala Sitharaman announced a Rs 6.28 lakh crore Stimulus Package on June 28, 2021. In this blog, we will cover all the key highlights of this package. So if you are interested in knowing everything about this Stimulus Package, read the blog carefully till the end.
About the Stimulus Package
The Stimulus Package entails measures to provide relief to diverse sectors affected by the second wave of Covid-19 pandemic. It aims to prepare the health systems for emergency response and provide an impetus for growth and employment. A total of 17 measures amounting to Rs. 6,28,993 crore were announced in the Economic Relief Package. These measures are divided among eight sectors which include healthcare, tourism, agriculture, infrastructure, and export, among others.
Let us now discuss the key highlights of this package one by one.
1. Expansion of Healthcare Infrastructure
- With the Credit Guarantee Scheme, an amount of Rs 23,220 crore has been earmarked to expand medical infrastructure for one year.
- Funding aims to increase the number of ICU beds and enhance the availability of equipment and liquid medical oxygen (LMO).
- It will focus on short-term emergency preparedness with special emphasis on children and paediatric care.
2. Rs 1.1 Lakh Crore Loan Guarantee Scheme
- A Rs 1.1 lakh crore loan guarantee scheme was announced for Covid-affected sectors.
- Out of the Rs 1.1 lakh crore, Rs 50,000 crore has been earmarked for the health sector.
- Under this scheme, 25 lakh beneficiaries will be able to borrow up to Rs 1.25 lakh through micro-finance institutions (MFIs).
- Allocation of funds will guarantee 75 percent coverage for new projects and 60 percent for expansion of existing projects. It will be guaranteed at an interest rate of 8.25 percent.
- It will also cover new projects related to healthcare in cities other than 8 metropolitan cities.
- Both public and private hospitals can avail a maximum of Rs 100 crore with a guarantee duration of 3 years.
3. Free Visas, Loan for Travel Agencies
- Once the issuance of visas resumes, the first five lakh tourist visas will be issued free of cost.
- This visa incentive will cost the government around Rs 100 crore.
- The Finance Minister announced a loan guarantee scheme for the tourism sector as it has been among the worst-hit sectors.
- Under the scheme, the loan will be given with 100 percent guarantee of up to:
- Rs 10 lakh for travel agencies
- Rs 1 lakh for regional tourist guides.
- As many as 10,700 regional tourist guides will be eligible to avail this loan.
4. ECLGS Cap raised by Rs 1.5 lakh crore
- The cap of the Emergency Credit Line Guarantee Scheme (ECLGS) has been raised to Rs 4.5 lakh crore. It was earlier Rs 3 lakh crore.
- ECLGS scheme was announced as part of the Atma Nirbhar Bharat package in 2020.
5. Rs 33,000 Crore for National Export Insurance Account (NEIA)
- It has been decided to provide an additional corpus to the National Export Insurance Account (NEIA) over 5 years. This will enable it to underwrite additional Rs. 33,000 crore of project exports.
- The NEIA, through EXIM Bank, facilitates cover for buyer’s credit to project exporters and borrowers with less creditworthiness.
- The Finance Ministry also proposed Rs 88,000 crore to boost export insurance cover.
6. Extension of Atma Nirbhar Bharat Rozgar Yojana
- The Finance Ministry on Monday extended the Atma Nirbhar Bharat Rozgar Yojana from June 30, 2021 till March 31, 2022.
- The Wage Subsidy Scheme aims to incentivize employers via EPFO to create fresh employment. It also focuses on beneficiaries with monthly wages less than Rs 15,000.
- According to the ministry, the move could also lead to an increase in the salary packages of new employees.
7. PPP Projects, DISCOMs, BharatNet
- A new process is being adopted to ensure speedy clearance of public-private partnership projects.
- The government has also allocated Rs 3.03 lakh crore to revamp DISCOMs (state-owned power companies). It will enable DISCOMs to opt for ‘reform-based, result-linked‘ power distribution through upgradation of existing systems and enhanced capacity.
- An additional Rs 19,041 crore has been earmarked for BharatNet. It aims to improve broadband connectivity to villages across the country.
- The Ministry has also extended the tenure of Production Linked Incentive Schemes (PLIs) for large-scale electronic manufacturing.
8. Fertilizer Subsidy, PMGKAY
- Nutrient Based Subsidy (NBS) for fertilizers has been increased to Rs 42,275 crore.
- Additional Rs 14,775 crore will be given to stakeholders, for DAP (Di-ammonium Phosphate) and NPK-based complex fertilizers.
- The government will release 21 new varieties of climate-resilient crop varieties developed by the Indian Council of Agricultural Research (ICAR).
- The North Eastern Regional Agricultural Marketing Corporation (NERAMAC) will also be revived. A stimulus of Rs 77.45 crore allocated for this purpose to enhance agriculture-related activities in the North East.
- Extension of the Pradhan Mantri Gareeb Kalyan Anna Yojana (PMGKAY) till November of this year.
Significance of the Stimulus Package
- This package will revive the employment-intensive sectors such as tourism.
- It will give a much-needed boost to the healthcare sector.
- It would usher in much-needed liquidity particularly for the small businesses.
- The measures will help to stimulate economic activities, boost production & exports and generate employment.
With this, we come to the end of this blog. We have covered all the major points of the ‘Stimulus Package’. We hope now you have a clear understanding of what this package is all about.
For more such informative content, stay tuned!
