Industry hails Aatmanirbhar Bharat 3.0 stimulus package as road to sustained economic recovery

The economic stimulus of Aatmanirbhar Bharat 3.0 announced by the government on Thursday is expected to further strengthen the path of recovery of the economy from the impact of COVID-19, according to industry voices.

The Aatmanirbhar Bharat 3.0 stimulus is to the tune of Rs 2.65 lakh crore taking into account even the Rs 1.46 lakh crore of the production linked incentives (PLI) scheme.

The government has provided three stimulus economic packages till now and Union Finance Minister Nirmala Sitharaman said this accounts for 15 percent of the GDP.

On the impact of the latest package, SBI Chairman Dinesh Kumar Khara said, “The latest round of stimulus package by the government is a bouquet of measures that incentivises job creation in the informal sector, expands the supply of loanable funds through enlargement of credit guarantee scheme to support stressed sectors and a strong push to real estate, with tax incentives for home buyers that could potentially unleash a price discovery in the real estate market.”

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He added, “The government also proposes to enlarge the rural employment scheme that could continue to support rural recovery. The support for project exports could potentially widen the risk-taking capabilities of EXIM Bank. Overall, these measures will ensure that we continue to take steps towards a sustained economic recovery.”

Finance Minister Nirmala Sitharaman had said the recovery was not just pent-up demand as positive indicators like fuel consumption, manufacturing index, foreign exchange reserves, stock market movement reveal that the economy was on the growth path.

The latest stimulus package gave a boost to the real estate sector with certain Income-Tax exemptions on property transactions,

Square Yards Co-founder and CFO Piyush Bothra said, “The stimulus 3.0 package has focused well on the real estate sector which has a significant multiplier impact on the economy due to its high employment generation capabilities. The increased outlay under PMAY (U) coupled with the increased gap vis-a-vis the circle rate of 20 percent would give a significant boost to the real estate sales, especially in the mid to low-price brackets. Further, the PF subsidy under the Atmanirbhar Bharat Rozgar Yojana will augur well in helping the stressed sector (which is one of the largest employers) in controlling its cost.”

The MSME segment has received a big boost from 3.0 stimulus with the extension of Emergency Credit Line Guarantee Scheme (ECLGS) till March 2021. This scheme was first launched in May to lower the financial stress of especially micro, small and medium enterprises by providing credit.

Capsian Debt co-founder and MD Viswanatha Prasad said, “ECLGS scheme and its implementation alacrity have helped MSMEs receive much needed liquidity during some difficult times. Extending the timelines to avail this scheme will help the companies who could not avail the scheme as their business were far from recovery will now be able to access it as the economy is making a slow and steady recovery. Focus on 26 sectors for increased credit flow is also a welcome move to bring in more liquidity for the companies.”

Vinod Parmar, Global Head-Sales and Marketing, Vayana Network, added, “The post-COVID-19 recovery is at a nascent stage and stimulus 3.0 will further strengthen it, though more could have been done. The MSME segment will certainly benefit from the extension of the ECLGS scheme for easier credit access.”

He also felt that announcement of performance linked incentives for the core manufacturing sectors will lay a lay strong foundations for manufacturing growth in India and help capture the alternative-to-China space.