The Prime Minister of India, Narendra Modi, during his address to the nation on 12 May 2020 announced the way forward for India in its battle again COVID-19. Among the announcements made about how India is tackling the virus, Narendra Modi announced a stimulus package of RS.20 lakh crore under the Atmanirbhar Bharat Abhiyan.
Government launches Atmanirbhar Bharat 3.0
The Government of India has launched Aatma Nirbhar Bharat Rozgar Yojana under Atmanirbhar 3.0 to incentivize job creation. The scheme is applicable for organisations registered under the Employees’ Provident Fund Organisation (EPFO). It will be effective from October 1, 2020 if they recruit new employees or those who lost jobs earlier. It will be effective till 30 June 2021.
The eligibility criteria for employees are: Beneficiaries who are new employees with a monthly salary less than Rs 15,000 as well as EPF members with a monthly salary less than Rs 15,000 who exited from employment from 1 March 2020 to 30 September 2020 due to the Covid-19 pandemic and who got employed on or after 1 October 2020.
The eligibility for organisations is EPFO-registered organisations that recruit new employees compared to the reference base of employees as of September 2020 with a minimum of two new employees if the reference base was 50 employees or less and a minimum of five new employees if the reference base exceeded 50 employees. Any organisationss registered with the EPFO after the scheme started will get subsidy for new employees.
The central government will provide subsidy support for two years for new eligible employees employed on or after 1 October 2020 as follows: For organisations with up to 1,000 employees, subsidy support of up to 24% of wages (employee's contribution which is 12% of wages and employer's contribution which is also 12% of wages. For organisations with more than 1,000 employees, the subsidy support will be for the employee's EPF contribution which is 12% of the EPF wages. The subsidy support will be credited in the EPFO account (UAN) of the eligible new employee which are seeded with Aadhaar. More than 95% of all organisations and 65% of all employees in the formal sector will be covered in the category where EPF contributions are provided as subsidy support by the government.
By releasing the relief package of Rs.20 lakh crore which was a part of the government’s measure to tackle the virus along with measures taken by the Reserve Bank of India, the Atmanirbhar Bharat Abhiyan is an economic scheme through which the funds totaling up to Rs.20 lakh crore will be disbursed to help the country fight COVID-19.
The economic package which consists of around 10% of India’s current GDP at Rs.200 lakh crore will be aimed at helping the local markets with production along with supply chains. In his speech, Prime Minister, Narendra Modi mentioned that the Atmanirbhar Bharat Abhiyan will be focusing on the land, liquidity and labour laws benefiting labourers, farmers, tax-payers along with MSMEs and the cottage industry.
With many sectors struggling to stay afloat along with the agricultural sector which includes farmers and labourers, this economic package will include helping small businesses under the MSME sustain themselves during this time. Moreover, the Prime Minister added saying that the economy of the country and its infrastructure will be the two main pillars of helping India become self-reliant. Along with this, a technologically driven system, vibrant demographics and demand will be playing important roles in this transition as well.
Updates on the Atamnirbhar Bharat Abhiyan
While the Prime Minister explained in brief about the economic package and what it aims to cover, the Finance Minister of India, Nirmala Sitharaman will be addressing the nation on 13 May at 4:00 p.m. through a press conference to give further details and updates about the Atmanirbhar Bharat Abhiyan and how the procedure of disbursal will take place.
According to reports, the Finance Minister is expected to announce a relief package for the MSME sector which has been greatly affected by COVID-19 and the lockdown in terms of halting of sales along with overdue payments. Speculations of tax sops have also been mentioned which includes rate cuts or changes of rates across various tax slabs for the industries and sectors which are highly labour-sensitive.
Finance Minister to announce Rs.2 lakh crore economic package for farmers and street vendors
In her second press conference to the nation, Finance Minister, Nirmala Sitharaman is to explain the breakdown of the Atmanirbhar Bharat Abhiyan which consists of a relief package of Rs.20 lakh crore. In the second phase of relief package, according to sources, the minister is likely to breakdown the relief package of Rs.2 lakh crore which will be for farmers and street vendors, who are included in an industry which is an unorganised sector.
In the first press conference, the Finance Minister announced relief packages aimed at MSMEs along with NBFCs and power distribution companies. A total of 15 measures were taken to help boost the economy along with offer extended guaranteed credit for MSMEs and collateral-free automatic loans for businesses. The government will also be offering Rs.90,000 crore to power distribution companies and state-run power finance companies.