On May 12, 2020, the Prime Minister announced a special economic package of Rs 20 lakh crore with the aim of making the country independent against the tough competition in the global supply chain and to help in empowering the poor, labourers, migrants who have been adversely affected by COVID. Finance Minister, Ms. Nirmala Sitharaman, through five press conferences, announced the detailed measures under the economic package.
| Schemes | Rs in Crores |
| Package announced earlier | 1,98,800 |
| Announced in part I | 5,94,550 |
| Announced in part II | 3,10,000 |
| Announced in part III | 1,50,000 |
| Announced in part IV and V | 48,100 |
| Total | 12,95,400 |
Increase in borrowing limits
The borrowing limits of state governments will be increased from 3% to 5% of
Gross State Domestic Product (GSDP) for the year 2020-21. This is estimated to
give states extra resources of Rs 4.28 lakh crore. There will be unconditional
increase of up to 3.5% of GSDP followed by 0.25% increase linked to reforms on - universalisation of
'One Nation One Ration card', Ease of Doing Business, power distribution and
Urban Local Body revenues. Further, there will be an increase of 0.5% if three
out of four reforms are achieved.
Privatization of Public Sector Enterprise (PSEs)
A new PSE policy has been announced with plans to privatize PSEs, except the ones functioning in certain strategic sectors which will be notified by the government. In strategic sectors, at least one PSE will remain, but private sector will also be allowed. To minimize wasteful administrative costs, number of enterprises in strategic sectors will ordinarily be only one to four; others will be privatized/ merged/ brought under holding companies
Collateral free loans for businesses
All businesses (including MSMEs) will be provided with collateral free automatic loans of up to 300000 Crore rupees.
Corpus for MSMEs
A fund of funds with a corpus of Rs 10,000 crore will be set up for MSMEs.
This will provide equity funding for MSMEs with growth potential and viability.
Rs 50,000 crore is expected to be leveraged through this fund structure.
Subordinate debt for MSMEs
The government will facilitate Rs 20,000 crore of subordinate debt to MSMEs.
A Special Liquidity Scheme was announced under which Rs 30,000 crore of investment will be made by the government in both primary and secondary market transactions in investment grade debt paper of Non-Banking Financial Companies (NBFCs)/Housing Finance Companies (HFCs)/Micro Finance Institutions (MFIs). The central government will provide 100% guarantee for these securities. The PCGS scheme will facilitate liquidity worth Rs 45,000 crores for NBFCs.
Under the PM Garib Kalyan Yojana, the government paid 12% of employer and 12%
of employee contribution into the EPF accounts. Relief of Rs 2,500 crore to
businesses and workers.
Statutory PF contribution
Statutory PF contribution of both the employer and employee will be reduced from 12% to 10% each for all establishments covered by EPFO for next three months. This scheme will apply to workers who are not eligible for the 24% EPF support under PM Garib Kalyan Package and its extension. However, Central Public Sector Enterprises (CPSEs) and State Public Sector Units (PSUs) will continue to contribute 12% as employer contribution.
Credit will be provided to each vendor for an initial working capital of up to Rs 10,000. This is estimated to generate liquidity of Rs 5,000 crore.
Concessional Credit Boost to farmers
Farmers will be provided institutional credit facilities at
concessional rates through Kisan Credit Cards. 2.5 crore farmers with
concessional credit worth 200000 Crore rupees.
Agricultural Infrastructure Fund
A fund of 100000 Crore rupees will be
created for development of agriculture infrastructure projects at farm-gate and
aggregation points (such as cooperative societies and Farmer Producer
Organizations). Farm gate refers to the market where buyers can buy products
directly from the farmers.[3]
Emergency working capital for farmers
An additional fund of Rs 30,000 crore will be released as emergency working capital for farmers. This is in addition to the financial support of Rs 90,000 crore that will be provided by NABARD to RCBs and RRBs to meet the crop loan demand this year.
The Pradhan Mantri Matsya Sampada Yojana (PMMSY) for development of marine and inland fisheries. Rs 11,000 crore will be spent on activities in Marine, Inland fisheries and Aquaculture and Rs 9,000 crore will be spent for developing infrastructure.
Animal Husbandry infrastructure development
Rs 15,000 crore fund will
be set up, with the aim of supporting private investment in dairy processing,
value addition, and cattle feed infrastructure.
Employment push using CAMPA funds
Rs 6,000 crore under the Compensatory Afforestation Management and Planning Authority (CAMPA) to facilitate job creation for tribals/adivasis.
One Nation One Card
Distribution from Public Distribution System
(Ration) from any Fair Price Shop in India by March 2021. All states/union
territories are required to complete full automation of fair price shops by
March 2021 for achieving 100% national portability.
Free food grain Supply to migrants
Migrant workers to get 5 kg of
grains per person and 1 kg of chana per family per month for two months.
Spending Rs 3,500 crore.
Affordable Rental Housing Complexes (ARHC) for Migrant Workers / Urban Poor
The migrant labour/urban poor will be provided living facilities at affordable rent under Pradhan Mantri Awas Yojana (PMAY).
Efficient airspace management
Restrictions on utilisation of the Indian
Air Space will be eased so that civilian flying becomes more efficient.
Public Private Partnership (PPP) model for airports
World-class airports will be built through PPP model. The private sector investment in these 12 airports is expected to be around Rs 13,000 crore.
FDI limit in defence manufacturing under automatic route will be increased
from 49% to 74%.
Make in India initiative will be promoted in the defence sector aiming to make
the country independent in terms of production.
Liquidity support for distribution companies (discoms)
A liquidity support of Rs 90,000 crore will be provided to power discoms.
Coal evacuation
Rs 50,000 crore will be spent on infrastructure development for evacuation of coal. This includes Rs 18,000 crore worth of investment in mechanised transfer of coal (conveyor belts) from mines to railway sidings.
Credit Linked Subsidy Scheme for Middle Income Group (MIG)
The Credit Linked Subsidy Scheme for Middle Income Group (annual income between Rs 6 lakh and Rs 18 lakh) will be extended by one year up to March 2021. The government has estimated that this will lead to an investment of over Rs 70,000 crore in the housing sector.
Public health
The investment in public health will be increased along with investment in grass
root health institutions of urban and rural areas.
Allocation for MGNREGS
Additional Rs 40,000 crore will be allocated
under MGNREGS. This increases the Union Budget allocation for MGNREGS from Rs
61,500 crore to Rs 1,01,500 crore (65% increase) for 2020-21.
Viability Gap Funding
Viability Gap Funding (VGF) for social
infrastructure projects will be increased by up to 30% of the total project
cost. The total expense for developing the social infrastructure is estimated be
Rs 8,100 crore.
Technology driven education
PM eVidya will be launched for multi-mode access to digital/online education. National Foundational Literacy and Numeracy Mission will be launched by December 2020 to ensure that every child attains learning level and outcomes in grade 5 by 2025.