Aatmanirbhar Bharat Package 3.0

The Finance Minister today unveiled the Atmanirbhar Bharat Package 3.0 to provide financial stimulus to the struggling economy. The package consist of 12 proposals as below:-

Sr. No. Particulars Announcement Impact on Economy
1 Atmanirbhar Bharat Rozgar Yojna  – Government to contribute the total EPF contribution (employee and employer share) for new employees or employee who exit from employment due to COVID-19 and has wages below INR 15000.
– Scheme to remain operational till June 30 2021
Although it is a welcome move however, one has to look into the fine prints to the amendments made. Prima facie, due to the wide coverage of this scheme some employers may involve in fire and hire for employees to get the incentive.
2 Emergency Credit Line for MSME – Extension of the existing 3 Lac Crores ECL scheme till 31st March 2021 with certain benefits
– Addition of the 26 stressed sector basis recommendation of Kamath committee
Additional of Kamath Committee recommended sector alongwith extension a welcome move.  It will give financial support to the critical industry sectors.
3 Production Linked Incentive to 10 champion sectors – 1.46 Lac crores of production linked investment for technology driven industry sectors
– Scheme to be devised by respective ministries
A much expected move however, its policy formulation and implementation will decide if it can be a boon for the economy.
4 PM Awaas Yojna – Additional allocation of funds for new schemes under PM Awaas Yojna – Real estate sector to directly get some relief for the new development. However, it will not help the Real estate player to clear their existing inventory.
5 Earnest Money deposit and security for Government tenders – Performance security reduced to 3% for government tenders
– Earnest money will be replaced by Bid Security declaration
It will definitely help the big construction contractors to free up working capital to them. It is to be seen if this applies to new tenders or existing tenders as well.
6  Tax relief for difference in property valuation – Increase the difference in sale value and stamp duty value from existing 10% to 20% for calculating income tax This is anyways expected from the government considering the slump in property demand and reduction in prices.
7 Equity investment in National Investment and Infrastructure fund (NIIF) -Government aims to strenghten investments in NIIF in order to help companies to raise debt/ equity funding. NIIF is currently gooding some good work in making systematic investments. The new fund infusion will help the companies to raise fund.
8 Subsidy for Fertilisers – Additional subsidy on fertilisers considering expectation of improved agricultural output This will help improving the agricultural output however, it can only benefit the farmers if the benefit of the subsidy is not transferred through the prices of agricultual produce.
9 PM Garib Kalyan Rozgar Yojna – Additional capital outlay of INR 10000 crores announced It will definitely help the big construction contractors to free up working capital to them. It is to be seen if this applies to new tenders or existing tenders as well.
10 Export Assistance – INR 3000 crores to be given to EXIM bank for extending line of credit (LoC) on behalf of GOI This will help Indian exporter to easily export goods from India on credit.
11 Additional budget for capex Additional budget of INR 10,200 crores for capex in defence, industrial incentives, infra and green energy sectors. Fund utilisation will play a key role in deciding the impact on the economy
12 R&D for COVID-19 Vaccine INR 900 crores to be given to Ministry of Biotechnology for R&D to develop COVID-19 Vaccine This announcement is not expected much support as the COVID-19 vaccine already under development.

Follow link for Atmanirbhar Bharat 3.0 Presentation.


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