FM Gifts ‘Aatma Nirbhar Bharat Stimulus Package 3.0’, on the Occasion of Dhanteras

The festival of ‘Dhanteras’ kickstarts the festivities of Diwali, bringing with it new hopes, aspirations, enthusiasm and vibrancy. According to Hindu mythology, on this day, Goddess Lakshmi emerged from the ocean of milk along with a pot full of Gold and Lord Kuber. It is believed that Goddess Lakshmi brings Lord Kuber to fulfill the wishes of the devotees. So, people worship Goddess Laksmi and Lord Kuber (God of wealth), on this auspicious day.

The Hon’ble FM Smt. Nirmala Sitharaman has also come up with the much needed Financial Stimulus Package – Aatma Nirbhar Bharat Stimulus Package 3.0’, on the auspicious occasion of Dhanteras, to revive the slugging Indian economy among corona pandamic.

The ‘Aatma Nirbhar Bharat Package 3.0’, consists of 12 Stimulus Packages which are discussed and analysed as under:

aatmanirbhar bharat

1)  Aatma Nirbhar Bharat Rozgar Yojna

A New Scheme Aatma Nirbhar Bharat Rozgar Yojna is being launched to incentivize creation of job creation and new employment opportunities during the Covid 19 recovery phase.

The Central Government will provide subsidy for two years in respect of new eligible employees engaged on or after 1.10.2020 at following scale:

Establishments employing upto 1000 employees: Employee’s contributions (12% of wages) & Employer’s contributions (12% of wages) totalling 24% of wages.

Establishments employing more than 1000 employees: Only Employee’s EPF Contributions (12% of EPF Wages).

The PF Subsidy Support will get credited upfront in Aadhar seeded EPFO Account (UAN) of eligible new employee.

More than 95% of all establishments and 65% of all employees in formal sector are estimated to be covered in first category, wherein EPF contributions will be given by Government by way of Subsidy Support.

Beneficiaries (New Employees) under the Scheme:

a. Any new employee joining employment in EPFO registered establishments on monthly wages less than Rs. 15,000/-.

b. EPF members drawing monthly wage of less than Rs. 15,000/- who made exit from employment during Covid pandemic from 1.3.2020 to 30.9.2020 and is employed on or after 1.10.2020.

Eligible Establishments under the Scheme:

Eligibility Criteria for Establishments:

a. Establishments registered with EPFO if they add new employees compared to reference base of employees as in September, 2020 as under:

    • Minimum of two new employees if reference base is 50 employees or less.
    • Minimum of five new employees if reference base is more than 50 employees.

b. Establishments registering with EPFO after commencement of Scheme to get subsidy for all new employees.

2) Demand Booster for Residential Real Estate Income Tax Relief for Developers & Home Buyers:

Increase in Safe Harbour Limits (Differential between the Circle rates & Declared Sales Consideration of Land & Buildings) from 10% to 20% u/s 43CA and section 56(2)(x) of the Income Tax Act, for the period from the date of announcement to 30th June 2021 for only primary sale of residential units of value up to Rs 2 crores, has been announced.

It is pertinent to mention here that the above increase in safe harbour limit from 10% to 20% has not been made applicable to secondary/resale of residential properties and as such the said benefit is not applicable for computation of capital gain u/s 50C of the Income Tax Act.

3) Emergency Credit Line Guarantee Scheme for MSMEs, Businesses, MUDRA Borrowers and Individuals (Loans for Business Purposes)

a. The ECLGS 1.0 Scheme is being extended till 31.03.2021, wherein fully guaranteed and collateral free additional credit of up to 20% of outstanding loans as on 29.2.2020 for entities with outstanding credit of p to Rs 50 crores as on 29.2.2020 and annual turnover of up to Rs. 250 crores, is being provided. Uptill 12.11.2020, Rs. 2.05 lakh crores of additional credit have been sanctioned to 61 lakh borrowers and Rs. 1.52 lakh crores have been disbursed.

b. The ECLGS 2.0 (Guaranteed Credit for supporting stressed sectors) is being launched to be utilized for 100% guaranteed collateral free additional credit at capped interest rates to:

i) Entities in 26 stressed sectors identified by Kamath Committee plus Health Care Sector with credit outstanding of above Rs. 50 crores and up to Rs. 500 crores as on 29.2.2020.

ii) Entities with outstanding of up to Rs. 50 crores previously covered under existing scheme.

iii) No upper ceiling on annual turnover.

iv) Entities to be up to 30 days past due (SMA 0) as on 29.2.2020.

v) Additional Credit of up to 20% of outstanding as on 29.2.2020.

(vi) Tenor of Additional Credit will be 5 years including one year moratorium on principal repayment.

(vii) The ECLGS 2.0 Scheme will be available till 31.3.2021.

4) Production Linked Incentive (PLI) Scheme worth Rs. 1.46 lakh crores is being offered to 10 champion sectors including mobile manufacturing & specified electronic components, critical key starting materials (KSM), drug intermediates and active pharmaceuticals ingredients (API), manufacturing & medical devices, automotive sector, white goods etc. to boost domestic manufacturing, exports & job creation.

5) A Provisions for Rs. 18000 crores Additional Outlay for PM Awaas Yojna (PMAY)- Urban, though additional allocation and Extra Budgetary Resources has been provided. This will help 12 lakh houses to be grounded and 18 lakh houses to be completed, with expected additional jobs of 78 lakhs and additional steel consumption of 25LMT & cement consumption of 131 LMT.

6) Support for Construction & Infrastructure- Relaxation of Earnest Money Deposit (EMD) & Performance Security on Government Tenders:

In order to provide the much-needed relief to the Contractors and to reduce locking up of their capital and cost of Bank Guarantee, the undermentioned Relaxation Measures in General Financial Rules are being prescribed:

Performance security on contracts to be reduced to 3% instead of 5 to 10%. This relaxation will be extended to ongoing contracts which are free of disputes, and to Public Sector Enterprises. States will also be encouraged to adopt this practice.

EMD will not be required for Government Tenders and will be replaced by Bid Security Declaration.

These relaxations will be given till 31.12.2021 under General Financial Rules.

7) Rs. 1.10 lakh crore Platform for Infra- Debt Financing with Infusion of Rs 6000 crore in NIIF Debt Platform has been announced.

8) Financial Support of Rs. 65000 crores for Subsidised Fertilisers to boost Agriculture has been announced.

9) Boost for Rural Employment by way of Enhanced Outlay of Rs 10000 crore under PM Garib Kalyan Rozgar Yojana, has been envisaged.

10) Boost for Project Exports through Release of Rs. 3000 crores to EXIM Bank for promotion of Project Exports like Railways, power, transmission, road & transport, auto & auto components, sugar etc. through Lines of Credit under IDEAS Scheme.

11) Rs. 10,200 crore additional budget outlay will be provided towards Capital & Industrial Expenditure in domestic defense equipments, industrial incentives, industrial infrastructure and green energy.

12) An R & D Grant of Rs. 900 crore for Covid Suraksha Mission for Research & Development of Indian Covid Vaccine to Department of Bio- technology has been announced in the Aatma Nirbhar Bharat Stimulus Package 3.0.

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Hi there!! I am Mayank Mohanka, FCA, Founder Director in TaxAaram India Pvt Ltd & Senior Partner in M/s S M Mohanka & Associates. Philosophy of Life: There is one thing which is more powerful than your Nav Grahas & that is Your Will Power.. I can be reached at mayankmohanka@gmail.com View Full Profile

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