Atmanirbhar Bharat Abhiyan - COVID-19 Relief Package
Atmanirbhar Bharat Abhiyan - COVID-19 Relief Package
Atmanirbhar Bharat Abhiyan - COVID-19 Relief Package
The COVID-19 pandemic has adversely affected the Indian economy and society in varied ways. In this
article, you can read the details of the Atmanirbhar Bharat Abhiyan - which is the name given to the full-
fledged economic stimulus package announced by the Union Government. This comes under the economy,
polity, disaster management and current affairs segments of the UPSC syllabus.
The government had initially announced the Pradhan Mantri Garib Kalyan Yojana (PMGKY) as interim
measures for those affected by the COVID-19 pandemic. To read about all the important government schemes
for the UPSC exam and other government exams, click on the linked article.
The Atmanirbhar Bharat Abhiyan (meaning self-reliant India scheme) was announced in four tranches by the
Union Finance Minister Nirmala Sitharaman in May 2020.
• The Prime Minister announced that an Atmanirbhar Bharat or a self-reliant India should stand on the
following five pillars:
o Economy
o Infrastructure
o 21st century technology driven arrangements and system
o Demand
o Vibrant Demography
• The 20 lakh crore worth package is almost 10% of the GDP of the country.
• The package emphasises on land, labour, liquidity and laws.
• The package includes measures across many sectors such as MSME, cottage industries, middle class,
migrants, industry, etc.
• Several reforms are announced to make India a self-reliant economy and mitigate negative effects in
the future. Some of the reforms are:
o Simple and clear laws
o Rational taxation system
o Supply chain reforms in agriculture
o Capable human resources
o Robust financial system
Let’s take a look at how India’s relief package stands in comparison to those announced by other countries:
The first tranche contained 16 specific announcements and they spanned across the MSME, NBFC, real estate,
power sectors, etc.
Category Measures
• Extended deadline for income tax returns for the financial year 2019-20 (due
date pushed to 30 Nov 2020)
• The rates of Tax Deduction at Source (TDS) and Tax Collection at Source
(TCS) have been cut by 25% for the next year.
Employees/tax
• EPF support, provided to low-income organised workers in small units under the
payers
PMGKY, is being extended for another 3 months.
• PF payments have been reduced from 12% to 10% for both employers and
employees for the next 3 months.
• The ₹3 lakh crore emergency credit line announced will ensure that 45 lakh units
will have access to working capital to resume business activity and safeguard
jobs.
• Provision of ₹20,000 crore as subordinate debt for 2 lakh MSMEs which are
stressed or deemed non-performing assets.
• A ₹50,000 crore equity infusion is planned, through an MSME fund of funds
with a corpus of ₹10,000 crore.
MSMEs • The definition of an MSME is being expanded to allow for higher investment
limits and the introduction of turnover-based criteria. Read more on May 20,
2020 CNA.
• Global tenders will not be allowed for government procurement up to ₹200
crore.
• The government and central public sector enterprises will release all funds due
to MSMEs within 45 days.
• Rs 30,000 crore special liquidity scheme, under which investment will be made
in investment grade debt papers of NBFCs.
• Partial credit guarantee scheme extended under which the govt. guarantees 20
NBFCs
per cent of the first loss to the lenders — NBFCs, HFCs and MFIs with low
credit rating.
• States and UTs have been advised to extend the registration and completion date
Real Estate of real estate projects by six months.
The second tranche focuses on providing free food grains to migrant workers who do not possess ration cards.
Provision Details
• The Centre will spend ₹3,500 crore for providing free food grains for migrant
workers without ration cards for the next 2 months. This is an extension of
Free food grains
the PMGKY.
• Street vendors will be given access to easy credit through a ₹5,000 crore
scheme, which will offer ₹10,000 loans for initial working capital.
• Plans to enrol 2.5 crore farmers who are not yet part of the Kisan Credit
Cards scheme, along with fish workers and livestock farmers, and provide
Credit facilities
them with ₹2 lakh crore worth of concessional credit.
• NABARD will provide additional refinance support worth ₹30,000 crore to
rural banks for crop loans.
• Small businesses who have taken loans under the MUDRA-Shishu scheme,
meant for loans worth ₹50,000 or less, will receive a 2% interest subvention
Subvention relief
relief for the next year.
• By August 2020, the ration card portability scheme will allow 67 crore NFSA
One Nation One beneficiaries in 23 connected States to use their cards at any ration shop
Ration Card Scheme anywhere in the country.
• States are directed to enrol migrant workers returning to their native places in
MGNREGA the MGNREGA scheme.
The third tranche of the economic relief package focuses on agricultural marketing reforms. Many of the
reforms announced are long pending and are expected to have a positive impact for both the farmers and the
consumers.
Provision Details
• Plans to enact a central law to permit barrier-free inter-State trade of farm
commodities and e-trading.
Inter-state trade • This will allow farmers to sell produce at attractive prices beyond the current
mandi system.
• Investment of 1.5 lakh crore rupees to build farm-gate infrastructure and support
Agriculture logistics needs for fish workers, livestock farmers, vegetable growers,
infrastructure beekeepers and related activities.
The final tranche focuses on the sectors of defence, aviation, power, mineral, atomic and space. There is a
huge emphasis on privatisation. One concern with this set of reforms is that they look more like industrial
reforms rather than an economic reform package or stimulus.
Sector Provisions
• Provisions for banning the import of some weapons and platforms to indigenise defence
production.
• There is a provision for a separate budget for domestic capital procurement. This would
help reduce the defence import bill and encourage domestic production.
Defence • The FDI limit in defence manufacturing under automatic route will be raised from 49%
to 74%.
• Ordnance Factory Boards (OFB) would be corporatized and listed on the stock market to
improve autonomy, efficiency and accountability.
• Six more airports are up for auction on private public partnership mode, while additional
private investment will be invited at 12 airports.
• Measures to ease airspace restrictions have been announced which would make flying
Aviation more efficient.
• Rationalising of the MRO (maintenance, repair and operations) tax structure with an aim
to make India an MRO hub.