Stimulus package

It is a package of economic measures put by the government to stimulate and strengthen the struggling economy. In this COVID -19 crisis, every country brought stimulus package to revive it’s economy. Recently, the Union Finance Minister Nirmala Sitharaman announced Atmanirbhar Bharat Abhiyan stimulus package of Rs. 20 lakh crores which is equivalent to 10% of India’s GDP.

It has broadly two objectives

  1. Minimising the human cost of COVID -19
  2. Converting this crisis into an opportunity by implementing structural reforms.

The stimulus package consists of fiscal support, monetary support, ease of doing business and some reforms such as

  1. The definition of MSME has been revised and the government will provide collateral free automatic loans of Rs. 3 lakh crore for a four – year tenure. There will be no principal repayment for one year.
  2. Government has reduced TDS rates by 25% and this will be enforced till March 31, 2021.
  3. Rs. 1.7 lakh package was given as relief under Pradhan Mantri Garib Kalyan package.
  4. Insurance cover of Rs. 50 lakh will be given to every health worker.
  5. Under MNREGA, wages have been increased from Rs 182 to Rs 202.
  6. Poor senior citizens, poor divyang workers and poor widows will be paid Rs 1000.
  7. Farmers will be paid Rs 2000 under Pradhan Mantri Kisan Yojana.
  8. RBI has reduced Cash Reserve Ratio and due dates of all IT Return filings have been extended from July 31 to Nov. 30, 2020.