November 13, 2020
A sequel to Atmanirbhar Bharat stimulus package 1.0 & 2.0, this recently announced package aims to create employment opportunities.
Atmanirbhar Bharat stimulus package 3.0 is to the tune of Rs 2.65 trillion, including the Rs. 1.46 trillion Production Linked Incentives scheme.
It has also allocated additional funds to the PM Awas Yojana to bolster steel and cement sale and production, directly contributing to the economic growth.
Till date Rs 29.87 trillion has been allocated towards the recovery of the economy under the aegis of Atmanirbhar Bharat Abhiyaan which is 15% of the country’s GDP
In a significant move to boost employment during COVID-19 recovery, the government of India announced the third leg of its Atmanirbhar Bharat stimulus package on 13th November 2020, focussed on creating employment opportunities and aid in the revival of businesses. The Atmanirbhar Bharat 3.0 stimulus is approximately Rs 2.65tn considering even the Rs 1.46tn of the Production Linked Incentives (PLI) schemes. An additional outlay of Rs 650 billion is being provided as a fertiliser subsidy to support increasing demand. This latest slew of initiatives encourages job creation in the informal sector, expands the supply of loanable funds through enlargement of credit guarantee scheme to support stressed sectors and a strong push to real estate, with tax incentives for home buyers that could potentially unleash a price discovery in the real estate. Rural development is key to the growth of any economy. The GOI also seeks to enlarge the rural employment scheme that could continue to support rural recovery. All-in-all these measures will ensure that India takes steps towards a sustained economic recovery.
The government of India’s philosophy revolves around creation of an ecosystem that aids domestic demand, encourages companies to generate jobs and augment production, benefitting those under severe stress afflicted by the pandemic, emphasising the financial conservationism dogma. These measures follow a multi-pronged approach aimed at generating employment and encouraging formalisation of workforce in urban areas, expanding the scope of distress employment provided in rural areas, easing the flow of credit to stressed parts of the economy, expanding the incentives offered to boost domestic manufacturing and kickstarting the real estate cycle, among others.
Till date the Government of India and Reserve Bank of India (RBI), have provided a total stimulus of Rs 29.87 billion to assist in the rehabilitation and recovery of the pandemic inflicted economy. This amounts to 15% of the nation’s GDP, out of which 9% is provided by the government. With the post-COVID recovery in its very nascent stage, this additional stimulus Atmanirbhar Bharat 3.0, will indeed strengthen the economic recovery.