"ATMANIRBHAR BHARAT PACKAGE" Noble initiative for economic growth

Perminder Jeet Kaur

(Director East and North East ASSOCHAM)

Coronavirus has caused a crisis for the global economy and markets. As innumerable lives are lost across the globe, the uncertainties of future are mounting. From developed nation to developing nations the social and economic impact of the pandemic is immense. Economies of several countries were slowing before the pandemic, and now COVID-19 threatens to push them into a steep recession. One such name is Japan, a leading globally economy, that is reporting recession owing to the global scenario.

In response to this crisis, various governments and central banks across the continents have enacted sweeping and sizable fiscal and monetary stimulus measures to counteract the disruption caused by coronavirus. To combat the disruption and to reduce the impact, United States , the world's largest economy, announced broad range of steps as US Congress passed trillions of dollars in fiscal programs, while the U.S. central bank, added trillions of dollars in monetary stimulus. Among European nations, Germany extended aggressive fiscal stimulus and relief measures and is believed to be the largest of any country in Europe in overall size and as a percent of the country's overall GDP.

India Inc too had its demand of support to improve the business confidence; and a stimulus was demanded to enable the industry and trade prepare self to face the global pandemic and minimise the damage.

India initiated its support mechanism on March 27, 2020, as the Reserve Bank of India lowered its repo rate. The bank injected $49 billion into the financial system by a combination of loosening capital restrictions and reserve ratios, as well as launching a "targeted long term repo operation," (TLTRO). This was followed by series of measures to support states, funds for smaller financial institutions, moratorium for banks. A day prior to RBI , its on March 26, 2020, India announced a $22.5 billion spending plan to help the nation's poor better cope with the pandemic, that included free grains and other staples for three months, insurance for healthcare workers, onetime cash payment to 30 million senior citizens and much more.

COVID-19 had its impact on the economic activities in India and all sectors of Indian industry took the hit. Responding to Industry demand and the need of the hour Govt of India announced a 20-lakh crore economic package, equivalent to 10% of GDP; the same was announced in five tranches. The 1st Tranche of Rs 5,94,550 crore encompassed special liquidity scheme for NBFCs, HFCs & MGIS worth Rs 30,000 crore to an emergency working capital facility for businesses of Rs 3 lakh crore with a subordinate debt for stressed MSMEs of Rs 20,000 crore and a fund of fund for MSMEs of Rs 50,000 crore . This is expected to provide much-needed relief to the MSMEs, micro finance institutions, housing finance companies, stressed real estate and construction sectors to mitigate the impact. By assuring 100 per cent government guarantee on Rs 3 lakh crore collateral -free loans to the MSMEs for a four-year term and one-year moratorium is a major step towards reviving the MSME sector which creates 11 crore jobs and accounts for 30 per cent of the country's GDP. The Rs 3 lakh crore collateral free loans for the MSMEs on guarantee from the government would have a big time multiplier impact and would generate economic activity of at least up to Rs 10 lakh crore , not only retaining the jobs but also creating additional employment.

Second Tranche of Rs 3,10,000 crore, aimed at providing additional credit through Kisan Credit with Rs 2 lakh crore, arrangement of additional emergency WCF through NABARD, Rs 30,000 crore with free food grain supply for migrant workers for 2 months and special credit facility for street vendors worth Rs 5,000 crore and much more. The third tranche of Rs 1,50,000 crore laid its focus on rural sector empowerment as focus was on beekeeping, Promotion of herbal cultivation, animal husbandry infra development fund, Micro food enterprises and allocated fund towards PM Matsya Sampada Yojana with additional agri infra fund of Rs 1 lakh crore. The fourth and the fifth trench focused on PM Garib Kalyan Package with Rs 1,70,000 crore and RBI measures , Rs 8,01,603 crore to provide relief to various segments of the country.

The mega package announced is all-encompassing, going well beyond the fiscal stimulus. The aim of the reforms leads to the 'Atma Nirbhar Bharat Abhiyaan' (Self-Reliant India). There is something for almost everyone from marginal farmers to street vendors. The measures are aimed at providing both the immediate relief in the form of free food grains supply to those with or without ration cards and the short to medium term support. The 'One Nation One Card ' PDS portability for migrant workers, would greatly dissuade the workers seeking to migrate to their home towns. Working capital under Mudra loan and promotion of digital payment amongst the informal workers would empower the informal but critical sector of the economy. It would prove to be catalyst step for formalising the informal sections of the society into the economy. Extension of the credit linked subsidy scheme up to March 31, 2021 for the middle income group would not only provide relief to them but also be a great demand booster for a host of industries related to real estate. Increased credit availability to the farm and allied rural sectors through extension of PM Kisaan card would also play a critical role in reviving the country's economic growth.

The vision laid by Prime Minister is highly praise worthy in order to fulfil the dream of making the 21st century and way forward that the country to become Self-Reliant (Atma Nirbhar Bharat) and time to become "vocal for our local" products and make them global. This is very bold step to encourage domestic however, there is a need to do more, as Atma Nirbhar will mean moving from just 'Made in India' to 'Made by India'. For North East of India this is an opportunity to take advantage of and lead the way forward for rest of India. (PIB)