Decoding AatmaNirbhar Bharat : Financial measures and breakup of 20 Lakh package.

Total compilation of all financial measures announced under AatmaNirbhar Bharat and the breakup of total package.

I) Pradhan Mantri Garib Kalyan yojana :

1.7 lakh crore --- 0.85 % of the GDP.

Direct Beneficiaries : 

1) middle class and lower middle class with ration cards.

2) MNREGA job card holders.

4) Women with Jandhan accounts.

5) Farmers under PM Kisan samman Nidhi (old initiative).

6) Widows, elders, and the disabled.

7) construction workers.

8) Organised workers with wage less than 15000/-.

9) Health workers.

10) Self help groups.

11) medical centres to fight covid-19

 

Benefits : 

1) In kind -- free food grains, pulses and LPG gas.

2) Direct cash transfer -- daily wage increase by 20/- for  MNREGA job holders,500/- each for women for next three months, 2000/-  for  each farmer (First installment under PM Kisan), 1000 /- for old people,widows and disabled for next three months.

3) For organised workers,24 percent of their monthly wages into their PF accounts for next three months.

4) States to use building and construction cess fund (31,000 cr) for the welfare of construction workers ( not clear on how exactly it will be spent for welfare of construction workers).

5) Insurance cover for 22 Lakh health workers.

6) limit of collateral free loans will be increased from 10lakh rupees to 20 lakh rupees for self help groups.

7) state govt to agument testing and medical facilities to fight covid-19 using district mineral foundation fund.

Fiscal burden on the Central Government - 85,695 cr ---0.43 % GDP.

II) Liquidity injection by RBI.

Size of the package -3.74 lakh cr -- 1.86 % of GDP.

Direct Beneficiaries : Banks.

Benefits : 

1) Targeted long term repo operations.

2) CRR cut of 100 basis points.

3) Accommodation under Marginal standing facility rate .

Fiscal burden on the Government - 0.

III) Liquidity injection by RBI.

Size of the package - 1 Lakh crore ---0.5% of GDP.

Direct Beneficiaries : Banks and financing institutions like SIDBI,NABARD and NHB.

Benefits: 

1) Targeted long-term Repo operations for Banks

2) Refinance of SIDBI,NABARD and NHB by RBI.

Fiscal burden on the government : 0.

IV) Special liquidity facility for MF by RBI.

Size of the package - 50,000 cr --0.25 % of the GDP

Direct Beneficiaries: Mutual Fund companies.

Benefit: RBI will inject liquidity in to Mutual funds.

Fiscal burden on the government : 0.

V) Revenue loss for the government due to COVID crisis - 7800 CR. 

VI) Allocation to Anti COVID health facilities - 15000 cr.

VII) Tranche -1 announced by FM.

 Size of  the package - 5.94 Lakh cr --2.97 % of GDP.

Direct Beneficiaries : 

1) MSME's.

2) Businesses and workers.

3) NBFCs,HFCs,MFIs.

4) Power distribution companies.

5) private employees.

6) Tax payers.

Benefits : 

1) collateral free automatic loans to MSME.

2) 100% credit guarantee cover to Banks and NBFCs on Principal and interest to be paid by these MSMEs .

3) Subordinate debt to provide equity to stressed MSMEs.

4) Support of 20,000 cr to CGTMSE (Credit Guarantee to Micro and Small Enterprises).

5) EPF support and EPF contribution reduction for businesses and workers for 3 months.

6) Special liquidity scheme for NBFC/HFI/MFI issued securities and fully guaranteed by the government.

7) partial credit guarantee scheme for NBFCs,first 20 % loss to be borne by the government.

8) Liquidity injection for power distribution companies by PFC/REC.

9) 25% reduction in TDS/ TCS rate on non-salaried specific payments by Tax payers.

Fiscal burden on the government : 25,500 Cr (0.13 % of the GDP) .

VIII) Tranche -2 announced by FM.

Size of the package : 3.10 lakh cr --- 1.55 % of GDP.

Direct Beneficiaries : 

1) Migrant labourers.

2) Small businesses under MUDRA.

3) Street vendors.

4) Middle income families.

5) Farmers.

Benefits: 

1) In kind --- Migrant labourers to get 5 kg of grains per person and 1 kg Chana per family per month for two months.

 2) Interest subvention scheme of 2% for payees Mudra-Sishu loans.

 3) special liquidity scheme to provide working capital to 50 lakh street vendors.

 4) credit linked subsidy to be extended till March 2021 to benefit middle income group and boost housing sector.

 5) CAMPA funds to be used by the states for afforestation and plantation works,this will job opportunities.

 6) concession credit to 2.5 Cr farmers  throughKisan credit cards.

Fiscal burden on the govt : 

 5000 cr ( 0.025%of GDP).

IX) Tranche -3 announced by FM.

Size of the package - 1.5 Lakh Cr -- 0.75 % of GDP.

Direct Beneficiaries: 

1) primary agricultural cooperatives, farmers producers organisations,

agricultural entrepreneurs and 

agri start-ups.

2) Micro food enterprises.

3) Fishermen.

4) Dairlly processing industries and Animal husbandry.

5) Herbal cultivators.

6) Horticulture cultivators.

7) Beekeepers.

Benefits:

1)  Financing facility of Rs. 1,00,000 crore will be provided for funding Agriculture Infrastructure Projects at farm-gate & 

aggregation points .

2) 10,000 cr scheme for formalisation of Micro Food Enterprises.

3) Funding for Fishermen through PM Matsya sampada Yojana.

4) Animal Husbandry infrastructure fund will be setup.

5) Promotion of herbal cultivation.

6) Infrastructure development related to Integrated Beekeeping Development Centres, Collection, Marketing and Storage Centres, Post Harvest & value Addition facilities etc.

7) Operation Greens will be extended from Tomatoes, Onion and Potatoes (TOP) to ALL fruits and vegetables (TOTAL).

Fiscal burden on Central government : 30,000cr -- 0.15 % of GDP.

X) Tranche - 4 announced by FM

Size of the Package : 8100 Cr. (0.04% of GDP).

Beneficiary :  social infrastructure.

Benefit : 

Government will enhance the quantum of Viability Gap Funding upto 30% each of Total Project Cost as VGF by Centre and State/Statutory Bodies.

Fiscal burden on the central government : 

8100 Cr. (0.04% of GDP).

XI) Tranche -5 announced by FM.

Size of the Package - 40,000 Cr -- 0.2 % of GDP.

Direct Beneficiaries: Job holders under MGNREGA.

Benefit : Additional allocation of 40,000 Cr to MGNREGA.

Fiscal cost to the central government - 40,000 cr (0.2% of GDP).

Total size of the financial Package (above Important 11 measures) along with some other additional RBI measures: 20,97,053 Cr rupees -- 10.49 % of GDP.

Total fiscal burden on the government: 2,17,095 Cr rupees -- 1.09 % of GDP.

Most of these financial measures are trageted towards infusing liquidity and some other measures are trageted towards Demand push.

How the central government will bridge this fiscal gap??

The government has already announced additional market borrowing as one of the means to finance the fiscal gap. There may be further additional borrowing via dated securities or short-term instruments if the revenue collection worsens in the coming months. Market estimates suggests fiscal deficit to be in the range of 7%- 8% of GDP for FY2020-21.

How the Government is planning to cope up with the additional fiscal burden? 

•  The impact of the additional outgo of Rs 2 trillion will be neutralised by as much as 89 per cent by two decisions the finance minister has already taken. The first decision was to suspend the payment of three instalments of dearness allowance to 5 million central government employees and 6.1 million pensioners till July 2021. The instalments were due to take effect from January 2020, July 2020 and January 2021. The savings for the Centre as a result of this decision in 2020-21 would be Rs 37,530 crore, or about 0.2 per cent of GDP.

• To increase the additional excise duty and cess on petrol and diesel, taking advantage of a steep fall in global crude oil prices. The government, as a result, would collect more revenue but there would hardly be any impact on retail prices. Analysts have estimated that even after assuming a 12 per cent fall in consumption of petrol and diesel (these two items account for about half of India’s petroleum products consumption), the government’s additional revenue from higher taxes and cess would be Rs 1.4 trillion, or about 0.7 per cent of GDP.

Sourced the above two important points from this article..

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