Finance Minister’s second set of “Atma Nirbhar Bharat”

On Thursday The Finance Minister Nirmala Sitharaman announces the second tranche of India’s ₹ 20 lakh crore COVID-19 relief package, with a focus on migrant workers, farmers, and urban poor.

Where on Wednesday’s announcements focused on small businesses, non-bank lenders, and the power sector.

Here are the key highlights of second announcements of “Atma Nirbhar Bharat”:

₹ 3,500 crore to be spent by the Government for benefits to 8 crore migrants. Free food grain supply for 2 months for those migrants that are neither covered under National Food Security Act, 2013 or hold a state beneficiary card. Such persons will be provided of 5KG wheat or rice per person and 1KG chana per family for the next 2 months extended to non-card holders. The state governments will be responsible for the implementation and distribution.

Technology systems being put into place to enable usage of ration cards for procuring food at any fair price shop in India.

Will launch a scheme for providing affordable rental housing accommodation for urban poor and migrant labourers.

Interest Subvention Scheme for Farmers Extended The interest subvention and prompt repayment incentive on crop loans due from March 1 has now been extended up to May 31, 2020.

FM said that “Interest subvention of 2% for 12 months on MUDRA-Shishu Loans that are below ₹ 50,000. This, coupled with the RBI’s loan moratorium, will give them a relief of up to ₹ 1,500 crore.” The current portfolio of MUDRA-Shishu loans is around ₹ 1.62 lakh crore.

The Finance Minister announced a Special Credit Facility for Street Vendors. The government will launch a special scheme within a month to facilitate easy access to credit for street vendors. Up to ₹ 10,000, Special loans provide working capital for street vendors to restart business which has been adversely impacted by the COVID-19 lockdown. This is expected to support 50 lakh street vendors and will provide liquidity of up to ₹ 5,000 crore. Digital payments will also be incentivized through monetary rewards and enhanced credit will be given for prompt repayments.

Extending Credit-Linked Subsidy Scheme (CLSS) that subsidizes interest rates on affordable home loans for those earning between ₹ 6 to 18 lakh annually till March 2021. FM Sitharaman said that “Around 3.3 lakh families have benefitted from this and the extension will benefit another 2.5 lakh middle income families. This will lead to an investment of over ₹ 70,000 crore in housing.”

Employment creation in urban, semi-urban, and rural areas through Compensatory Afforestation Fund Management and Planning Authority (CAMPA) funds. The government says it has already received proposals worth ₹ 6,000 crore to help generate employment for Tribals and Adivasis.

Concessional credit of up to ₹ 2 lakh crore for Kisan Credit Cardholders: The finance minister announced that “A special drive will be undertaken to provide concessional credit to PM-KISAN beneficiaries through Kisan Credit Cards. Up to 2.5 crore farmers will be benefited from the credit flow of about ₹ 2 lakh crore. It will also include those involved in animal husbandry and fisheries.”

The central government will announce another ₹ 30,000 crore additional emergency capital fund through NABARD for crop loan requirements of Rural Cooperation Banks and RRBs (Regional Rural Banks). The NABARD already provides up to ₹ 90,000 crore annually as working capital to be provided by NABARD through normal refinance. NABARD will extend the refinance support for crop loan requirements of rural cooperative banks. The additional funds will be released immediately, the Finance Minister said. This will help up to 3 crore small and marginal farmers.

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