Stimulus push: Agri, housing, rural sectors get big Central fiscal booster
By siliconindia | Friday, 15 May 2020, 05:00 Hrs
Finance Minister Nirmala Sitharaman tried to assuage the economic concerns of farmers, workers and street vendors on Thursday with a mega package offering everything - loans, interest subventions and cheap housing.
On the second day of detailing the mega Rs 20 lakh crore economic package under the Centre's 'Self-Reliant India Movement' which was earlier announced by Prime Minister Narendra Modi, she doled out massive loan components for agriculture and the housing sector.
For regulatory relief, the minister talked about implementing the "one nation, one ration card" system. This system will allow national portability of ration cards throughout the country using technological intervention.
Besides, she assured the workers that the right to universal minimum wages is on the Centre's agenda. She said the Centre is committed to universal minimum wage and other facilities for workers in the country. At present, the bill for the new labour code is pending in Parliament.
The Centre will also launch a scheme under the Pradhan Mantri Awas Yojana for the migrant labour and the urban poor to build affordable rental housing facilities for them. Sitharaman said that under the scheme, government-funded housing in different cities will be converted into affordable rental housing complexes under the public-private partnership mode.
The government will also incentivise manufacturing units, industries, institutions and associations to develop affordable rental housing complexes on private land and operate them.
Additionally, the FM announced that the Credit Linked Subsidy Scheme (CLSS) for middle income groups to buy affordable housing units will be extended till March 31, 2021. The scheme was last extended till March 2020.
Sitharaman said the extension will benefit 2.5 lakh middle income families. So far, the scheme has benefited 3.3 lakh middle class families, she added.
The Finance Minister said it will lead to an investment of Rs 70,000 crore in the housing sector and also create jobs.
For street vendors, she announced a Rs 5,000 crore 'Special Credit Facility'. This scheme will be launched within a month to facilitate easy access to credit to street vendors. It intends to provide initial working capital of up to Rs 10,000 and is expected to support nearly 50 lakh street vendors.
In terms of fiscal stimulus, the Centre came out with Rs 2 lakh crore concessional credit boost to 2.5 crore farmers through Kisan Credit Cards. This plan envisions enabling farmers to gain access to institutional credit at con cessional interest rates.
The minister also announced a measure to provide free food-grain supply to migrants for 2 months.
In addition, a Rs 1,500-crore 'Interest Subvention Scheme for MUDRA-Shishu' loans was also announced. On Wednesday, the FM had listed out 15 new and some enhanced measures to revive businesses, and support workers via fiscal incentives and regulatory easing under the mega stimulus package. She had announced a slew of fiscal and regulatory measures for MSMEs, real estate, NBFCs, power distribution and general businesses and workers.
These announcements were made a day after the Prime Minister announced a mega stimulus package which will take the total amount announced by the Ministry of Finance and the RBI to a total of Rs 20 lakh crore or 10 per cent of the GDP.
According to Confederation of Indian Industry's Director General Chandrajit Banerjee: "The second tranche of stimulus package rightfully focussed on providing relief to poor including migrant workers, farmers, street vendors and members of tribal community which have borne the brunt of the lockdown necessitated due to Covid-19 outbreak."
"It is heartening to note that the immediate availability of Rs 30,000 crore of Emergency Working Capital Funds through NABARD for the small & marginal farmers is expected to meet post-harvest rabi and current kharif related work."
Another industry body Ficci's President Dr Sangita Reddy said: "Today's announcements take forward the elements that were mentioned in the Pradhan Mantri Gareeb Kalyan Yojana and add more dimensions to it. We hope that the government has planned for the implementation of these schemes well in conjunction with the state governments who will have a major r ole to play here."
"There has been a mix of both short-term measures as well as long-term plans that would enable us to remain prepared for managing the disruptions in people's lives by episodes such as the one being seen today," she added.
Assocham's Secretary General Deepak Sood said: "Some of the measures under the second tranche of the PM's package, announced by Finance Minister Mrs Nirmala Sitharaman today, show how the government is empathetic to the difficulties being faced by 8 crore migrant labourers, small and marginal farmers and street vendors."
He said that the measures are aimed at providing both the immediate relief in the form of free food grain supply to those with or without ration cards and the short to medium term support. The 'One Nation One Card,' PDS portability for migrant workers, would greatly dissuade the workers seeking to migrate to their home towns.
PHD Chamber's President D.K. Aggarwal said the extension of the CLSS scheme till March 2021 and Rs 70,000 crore boost to housing sector will stimulate demand for housing, steel, cement, transport and other construction-related materials.
Easy access to credit facility of Rs 5,000 crores to all street vendors and interest subvention support of 2 per cent under Mudra-Shishu loans of Rs 50,000 or less for next twelve months will help the vendors and businesses to resume their activities post lockdown, Aggarwal said.