Will the fresh COVID stimulus package boost India's economy?

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Union Finance Minister Nirmala Sitharaman has announced a Rs 6.28 lakh crore stimulus package. The package aims to boost Covid-affected sectors through eight measures proposed by the Ministry of Finance and includes four new economic relief measures. Here are the highlights..

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Expansion of healthcare infrastructure


The Centre will spend an additional Rs 23,220 crore for short-term health emergency preparedness for the COVID-19 pandemic. The funding aims to increase the number of ICU beds and enhance the availability of equipment and liquid medical oxygen (LMO). Special emphasis will be laid on the preparedness of the healthcare infrastructure in terms of child and pediatric care.

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Free visas, loan for travel agencies


Once issuance resumes, the first five lakh tourist visas will be issued free of charge, said the Union Finance Minister. The incentive will cost the government around Rs 100 crore. Sitharaman also announced a loan guarantee scheme for the tourism sector, which has been one of the worst-hit by the coronavirus pandemic. The loan will be provided with a 100 per cent guarantee of up to Rs 10 lakh for travel agencies and Rs 1 lakh for regional tourist guides. As many as 10,700 regional tourist guides will be eligible to avail of the loan.

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Rs 1.1 lakh crore loan guarantee scheme


The Union Finance Minister announced a Rs 1.1 lakh crore loan guarantee scheme for Covid-affected sectors out of which Rs 50,000 crore has been earmarked for the health sector. As many as 25 lakh beneficiaries will be able to borrow up to Rs 1.25 lakh through micro-finance institutions (MFIs) under this scheme. The allocation of funds will guarantee 75 per cent coverage for new projects and 60 per cent for expansion of existing projects at an interest rate of 8.25 per cent. Both public and private hospitals will be able to avail a maximum of Rs 100 crore with a guarantee duration of up to three years.

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ECLGS cap raised by Rs 1.5 lakh crore


An additional Rs 1.5 lakh crore was announced for ECLGS, launched as part of the 'Atmanirbhar Bharat Package' in May 2020. With the latest announcement, the overall cap of admissible guarantee under the scheme has been raised to Rs 4.5 lakh crore from Rs 3 lakh crore earlier.

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Rs 33,000 crore for NEIA


The government will provide an additional corpus to  National Export Insurance Account (NEIA) over 5 years to allow it to underwrite additional Rs 33,000 crore of project exports. It will also infuse equity in Export Credit Guarantee Corporation (ECGC) over 5 years to boost export insurance cover by Rs 88,000 crore.

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Extension of Aatmanirbhar Bharat Rozgar Yojana


The Centre extended the scheme to boost employment till March 31, 2022, from June 30, 2021 earlier. Launched in October last year, the scheme incentivises employers for the creation of new employment and restoration of loss of employment through EPFO. A benefit of Rs 902 crore has been provided to 21.42 lakh beneficiaries of 79,577 establishments till June 18 this year.

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PPP projects, DISCOMs, BharatNet


A new process is being adopted to ensure speedy clearance of public-private partnership projects. The government has allocated Rs 3.03 lakh crore to revamp DISCOMs (state-owned power companies), which will enable the latter to opt for 'reform-based, result-linked' power distribution through upgradation of existing systems and enhanced capacity. An additional Rs 19,041 crore has been earmarked for BharatNet, which aims to improve broadband connectivity to villages across the country. The Finance Ministry has also extended the tenure of Production Linked Incentive Schemes (PLIs) for large scale electronic manufacturing.

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Fertiliser subsidy, PMGKAY


The Nutrient Based Subsidy (NBS) for fertilizers has been increased to Rs 42,275 crore. An additional amount of Rs 14,775 crore will be provided to stakeholders, including DAP (Di-ammonium Phosphate) and NPK-based complex fertilisers. The government will also release 21 new varieties of climate-resilient crops developed by the Indian Council of Agricultural Research (ICAR). Furthermore, a stimulus of Rs 77.45 crore has been earmarked to enhance agriculture-related activities in the North East. FM also announced the extension of the Pradhan Mantri Gareeb Kalyan Anna Yojana (PMGKAY) till November of this year.