Will the good economics of PM Modi and FM Sitharaman, aiming at self-reliant India translate into action, asks Dr Navodita. An exclusive for Different Truths.

In the middle of Lockdown 3.0, PM Narendra Modi addressed the nation and announced the Rs. 20 lakh crore ‘Atma Nirbhar Bharat Abhiyaan’ package for the poor and those in need, Finance Minister Nirmala Sitharaman announced a slew of big-ticket announcements. Key highlights are given below:

In the middle of Lockdown 3.0, PM Narendra Modi addressed the nation and announced the Rs. 20 lakh crore ‘Atma Nirbhar Bharat Abhiyaan’ package for the poor and those in need

u Ministries held detailed talks with industries and PM’s Office on an economic package

u The ‘Atma Nirbhar Bharat Abhiyan’ initiative to spur growth and help in building self-reliant India

u Plan based on five important pillars: economy, infrastructure, tech-driven systems, demography and demand

u Prime Minister has laid out a comprehensive vision, which is based on wide and deep consultations with several sections of society

FM laid out details of PM’s Vision over the next few days :

l Government to announce 15 different measures

l 6 for MSMEs

l 2 for employees

l 2 for NBFCs and MFIs

l Focus to be on factors of production – land, labour, liquidity and law

l Local brands to be brought to global level

l Focus will be on nurturing local brands as part of this mission

l Global value chain integration part of PM’s plan

l We have the capability to build such enterprises

l All schemes rolled out by the government since it came to power are driven by reforms

l Direct Benefit Transfer (DBT) scheme helped the government deliver the money directly to Jan Dhan accounts of the poor

l Rs 52,606 crore transferred to 41 crore Jan Dhan account holders under PM Garib Kalyan scheme

l Refunds of Rs 18,000 crore made to income tax assessees, 40 lakh taxpayers benefitted

l Finance Minister announces collateral-free loans worth Rs 3 lakh crore for MSMEs with turnover up to Rs 100 crore till October 31, 2020

l Move likely to benefit 45 lakh units so they can resume their businesses

l 4-year collateral-free loans to be 100% credit-free, with a moratorium for first 12 months

l Definition of MSMEs being changed

l Company with an investment of Rs 1 crore, turnover of Rs 5 crore is a micro-enterprise under new definition; one with Rs 10 crore investment, turnover of Rs 50 crore a small enterprise; one with Rs 20 crore investment, Rs 100 crore turnover a medium enterprise

l No global tender for government procurement up to Rs 200 crore

l EPF support of Rs 2,500 crore extended for another three months: June, July and August (government to pay employee, employer contribution to EPF accounts)

l Support towards months March, April, May already announced earlier as part of PM Garib Kalyan scheme; that scheme being extended for another three months (June-August)

l 3,67,000 organisations to benefit

l Announces Rs 30,000 crore liquidity push for non-banking financial companies (NBFC), housing finance companies (HFC), microfinance institutions (MFI)

l Rs 90,000 crore liquidity for power distribution companies

l Six-month extension for government contractors; builders get more time to finish projects

l Income tax return assessment due date for the financial year 2019-20 extended from July 31 and October 31 to November 30; tax audit date from September 30 to October 31

The Corona virus-triggered lockdown has pushed an already ailing economy into a standstill hampering businesses and rendering thousands jobless. Economists will be watching closely the economic impact of the package announced by the government, something Modi has announced to combat the financial crisis arising out of COVID-induced lockdown.

The Corona virus-triggered lockdown has pushed an already ailing economy into a standstill hampering businesses and rendering thousands jobless. Economists will be watching closely the economic impact of the package announced by the government

In a series of tweets after the address, the Finance Minister called it not just a financial package but a “reform stimulus and a mindset overhaul”.

Some of the tweets are enlisted here:

A special economic package is being announced- for an Atma Nirbhar Bharat Abhiyan with nearly 10% of a GDP (approx Rs 20 lakh) getting committed. MSMEs and the honest middle-class help build a #selfreliant India, says @PMOIndia@narendramodi

— Nirmala Sitharaman (@nsitharaman) May 12, 2020

The Indian economy has acquired strength in its various dimensions. Now, we can confidently engage with the world. We aim at overall transformation & not incremental changes. We shall convert the pandemic challenge into an opportunity. #AatmanirbharBharat will integrate not isolate.

— Nirmala Sitharaman (@nsitharaman) May 12, 2020

“#AatmanirbharBharat Abhiyan to include everyone-a hawker/street vendor, a trader, an MSME, an honest tax-paying middle class, a manufacturer etc. This shall not be just a financial package, but a reform stimulus, a mindset overhaul, and a thrust in governance,” Ms Sitharaman posted.

Self-reliant India “does not imply isolationism or becoming exclusionist,” she posted.

“We’ll build capacities, skill people and compete globally acquiring strengths. We’ll build the #Local. After all, every global brand began with their #Local strength.”

A big challenge ahead of Lockdown 4.0 is to watch how the economy progresses. The big question is: is the Modi push to give a boost to the indigenous sector going to be the changemaker and steer India to a self-reliant economy

A big challenge ahead of Lockdown 4.0 is to watch how the economy progresses. The big question is: is the Modi push to give a boost to the indigenous sector going to be the changemaker and steer India to a self-reliant economy or is the growth going to take a backseat, come what may?

Photo from the Internet