Thanks for reading and responding to my previous article " The Kick-start ". The purpose of this article is to show you a clear picture of how the part-II of the current economic stimulus is going to affect India, in the simplest possible way.
14 May 2020, our Finance Minister Nirmala Sitharaman started announcing the further initiatives of the " Atma Nirbhar Bharat " program.
In an hour-long address, the center targeted the migrant labors, farmers, and street vendors who are heavily affected by the nation-wide lockdown. F.M announced a total of 9 initiatives - • 3 for Migrant workers • 1 for Street vendors • 1 for Small traders
• 1 for Self-employed people • 2 on Small Farmers • 1 on Housing Let's see how the center plans to put money in these sectors to pull out these nation-builders from this difficult time.
Farming-
i) Direct support to the farmers-
• About 3 crore marginal farmers have availed the loan of total Rs. 4.22 lakh crore. i) Due to lockdown and operations halt farmers are facing difficulty to repay the principal.
• To address this issue the GOI has given the benefit by providing 3 months no obligation period to pay the principal.
• Similarly the Interest Subvention ( some part of the total interest is paid by the govt.) and prompt repayment incentive ( govt pay incentive to the prompt payers of the interest) on crop loans that were due on 1st March, extended up to 31st May,20. This assists farming sector to manage themselves financially as the tenure for incentives and borrowings is exceded. • Government to avail credit facility to 25 lakh new kisans by providing the Kisan Credit Card, and aims to sanction total loan limit of Rs 25000 cr.
• Credit boost of Rs 2 lakh cr to 2.5 crores Kisan Cardholders which will also include animal husbandry farmers.
The above measures can introduce high capital in our farming sector. •Also, India has another 62 lakh farmers who have availed the loan aggregating to Rs 86,600 cr. •With the help of NABARD, they financed an amount of Rs. 29000 cr to co-operative banks and rural banks in March 2020 for sustaining the mounting pressure. •Further, states will be also provided the working capital limit (a type of loan which you can avail anytime within a certain period) of total Rs 6700 cr for the procurement of agriculture produce. This will help farmers in making investments in the time of this Pandemic without much fear.
Migrant workers -
•Everyone is aware of the situation of migrants and the Urban poor.
•Due to mismanagement of the center and state authorities, they have been forced to move to their native villages. Therefore the center had given a nod to the states to utilize State Defense Response Fund for availing shelter, food, and water Still, it has not halted the movement of migration. Providing them money and employment, wherever they are now, at hand can have a greater impact.
But how?? •Government to provide jobs the migrant workers at hand by planning to start the MNREGA with the increased average wave rate to 282 Rs from Rs 182.
• Also the Self Help Groups (SHG) which are working day-night for manufacturing masks and sanitizers will open employment opportunities for the urban poor.
• Government claimed that about 7200 new SHGs of urban poor have been formed in the last 2 months.
Workers-
•The government has addressed their issue by making changes in the labour codes.
•To date, only the organized sector workers used to make timely payments, which constitute 30% of total workers. •So the government decides the universalization of the right of minimum wages and timely payment of wages which will now benefit all the workers. •Over 70 percent of workers belonged to the unorganized sector before, so to formalize this sector government will now provide an appointment letter to all the workers. • Government to apply Occupational Safety & Health code to all the establishments engaged in work of hazardous even with threshold less of 10.
(OSHD code ensures the safety of workers in the establishment, earlier this code was applicable only if the strength was greater than 10, now govt has removed the threshold criteria) • To provide social security schemes. • Earlier to receive gratuity you need to serve in an organization for 5 consecutive years, the government of India has reduced this term to 1 year.
The government has majorly focused on the security and income sources of the workers.
Food scarcity -
•GOI to provide free supplies to the migrants for another 2 months. • The scheme will be applicable for even even though they don't own a ration card. The government plans to pump Rs 3500 crore for this initiative. •To eliminate the problem of availing ration from the different states for the migrant workers here onwards, the government plans to start ' One Nation One Ration' which will have National level portability. After food, the government plans to provide the rental complexes for the migrant/urban poor under PM Awas Yojna. •This will be done under the public-private partnership model.
•He is the good news for the people who have availed loans from the Mudra-Shishu scheme. •The government will be providing 2% of Interest Subvention for 12 months. ( Interest subvention is already explained) Thus the Government will bear a total sum of Rs 1500 crores in this scheme.
Street vendors-
•As the entire country is in lockdown and due to halt in all the outward activities street vendors have got a huge hit, as all the source of their money is just stopped. • The Government extends the support to 50 lakhs street vendors via 5000cr Rs special credit facility. ( Accounting to Rs 10000 as initial capital ) • Will also incentivize digital payment, thus giving thrust to the digital Economy.
Middle-Class Public-
•For the people with income range 6L-18L government will bring down housing loan EMIs by Rs 2000 per month.
• Thus this will act as an interest subsidy & is estimated to affect 2.5 lakhs Family.
This will add a significant amount of disposable income in the hand of the middle-class of India. Overall market forces have labelled these measures balanced for the upliftment of our marginalized and highly affected class. Economists and industrialists believe the steps will surely help India in reviving its economy. Separately Government also conveyed the allocation of Rs 3100 cr to fight against Covid-19, with Rs 2000cr for purchasing ventilator and remaining for the migrant laborers via PM-CARE fund.
I hope you find this article better and got a clear picture of the distribution. Please share this article and follow @theoldmonk47 for further political updates.
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