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Wednesday, November 25, 2020

Scheme to incentivise job creation, credit line for stressed sectors: Top Sitharaman announcements

FM Nirmala Sitharaman announcements: To boost rural employment, Sitharaman announced an additional outlay of Rs 10,000 crore to be provided for PM Garib Kalyan Rozgar Yojana in the current financial year

By: Express Web Desk | New Delhi | Updated: November 12, 2020 6:28:51 pm
New Delhi: Union Finance Minister Nirmala Sitharaman and Minister of State Anurag Thakur during a news conference in New Delhi, Thursday (PTI)

FM Nirmala Sitharaman announcements: To boost the coronavirus-hit economy, which likely entered into a technical recession for the first time in history, and ramp-up capital expenditure, Finance Minister Nirmala Sitharaman on Thursday announced a new scheme to incentivise job creation, measures for 26 stressed sectors, benefits for home buyers and real estate developers as part of Atmanirbhar 3.0 stimulus package worth Rs 2,65,080 crore. Sitharaman said the Covid-19 stimulus provided so far added up to 15 per cent of GDP, of which the government contribution was 9 per cent.

Saying that the Indian economy was witnessing a strong recovery, Sitharaman announced an “Aatmanirbhar Bharat Rozgar Yojana”, under which EPF-registered organisations would get benefits on recruiting new people who didn’t have EPFO before or those who lost their jobs between March 1 and September 30.

The scheme will cover any new employee joining employment in EPFO-registered establishment on monthly wages less than Rs 15,000. It will also cover EPF members drawing monthly wages of less than Rs 15,000, who lost their jobs during COVID-19 pandemic from March 1, 2020 and is employed on or after October 1, 2020.

“Employees contribution (12 per cent of wages) and employer’s contribution (12 per cent of wages) totaling 24 per cent of wages would be given to establishments for two years,” Sitharaman said. However to avail the scheme, operational till June 30, 2021, establishments with up to 50 employees will have to add a minimum of two new employees and those with more than 50 staff, will have to give a minimum of five new jobs.

To boost rural employment, Sitharaman announced an additional outlay of Rs 10,000 crore to be provided for PM Garib Kalyan Rozgar Yojana in the current financial year. In Budget 2020-21, the government had provided Rs 61,000 crore for MNREGA and an extra Rs 40,000 crore in the first AtmaNirbhar package. So far, Rs 73,500 crore has been already spent.

For 26 stressed sectors identified by the Kamath committee, the Centre extended the Emergency Credit Line Guarantee Scheme till March 31. “The original ECLGS had one year of moratorium and 4 years of repayment while the  new scheme will have one year moratorium and 5 years of repayment,” Sitharaman said, adding that Rs 2.05 lakh crore had been sanctioned to 61 lakh borrowers and Rs 1.52 lakh crore disbursed so far.

The set of measures also include the earlier announcement of production-linked incentives worth about $27 billion (Rs 2 lakh crore) over five years for manufacturers in 10 sectors.

In a boost to the Pradhan Mantri Awas Yojana that will help completion of 18 lakh houses, Sitharaman said Rs 18,000 crore would be provided over and above the budget estimate that was mentioned in the Budget. To promote construction, the Finance Minister also announced a cut in performance security cut to 3 per cent from 5 per cent.

Moreover, in a decision that will stand to benefit home buyers and real estate developers, Sitharaman announced relaxations in income tax rules to allow sale of primary residential units of up to Rs 2 crore value below the circle rate.

Till now, only 10 per cent difference between the circle rate and the agreement value was allowed. To boost residential real estate sector, she said the differential has now been increased to 20 per cent for period up to June 30, 2021.  “This measure will reduce hardships faced by both home-buyers and developers and help in clearing the unsold inventory,” she said.

Besides, to help it raise money, the government will infuse Rs 6,000 crore equity in NIIF Debt Platform. To shore up investment, Sitharaman also announced Rs 10,200 crore extra outlay towards capital expenditure in addition to the Rs 25,000 crore provision already made for roads, ports and defence projects. “This will create demand for domestic defence equipment, green energy, and industrial infrastructure,” she said.

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