Here’s what to make of the 20 lakh crore-economic package

Modi’s idea of turning COVID-19 to our advantage is making India ‘Atmanirbhar’. While this notion is quite inspiring given the extended gloomy days, achieving the mission demands a generous financial infusion. And, the govt did announce a Rs 20 lakh crore economic package to revive our economy. But we suggest considering the caveats before drawing conclusions.

Breakdown of 20 lakh crore-economic relief package
The 20 lakh crore-package will not entirely have fresh funds but subsume all the previous fiscal measures announced by the govt in the months of Feb to Apr. In addition, it also subsumes RBI’s policies. However, govt expenditure is different from RBI’s. Ergo, the value of COVID-19 relief package is ideally less than what it is purported to be. The good news? The package can still pull the economy back from the muddy waters.

We’ll tell you why. We’ll also tell you the significance of the measures.

The economic relief package will be disseminated in phases
On Tue, Modi addressed the nation regarding coronavirus for the 5th time. On the following day, FM Sitharaman took to the media and elaborated the Rs 20 lakh crore-economic package that Modi had announced in his speech. FM, along by her team, are to hold daily press conferences to disseminate information about the centre’s responses aimed at reviving the economy. Here’s what we know and want you to know.

Wed’s brief

For MSME

• MSMEs with outstanding loans of Rs 25 crore or turnover of Rs 100 crore will get collateral-free loans of Rs 3 lakh crore. In addition to a 12-month moratorium, such loans will have a tenor of 4 years
• Stressed MSMEs or those with NPAs will get equity support via subordinate debt of Rs 20,000 crores
• Micro, small, and medium enterprises and their investment limit redefined so they can expand and enjoy a host of benefits at every level of growth
  MSMEs to get govt’s equity infusion worth Rs 50,000 crore
• Coined as ‘Fund of funds’ the plan is to have a Mother Fund (govt’s investment) and several Daughter Funds (non-govt investment) to fuel MSMEs’ expansion
• Lack of exhibitions and trade fairs dude to COVID-19 will be made up for by creating e-market linkages across the MSME board
• Govt of India and Central Public Sector Enterprises will clear each MSME’s accounts receivable in 45 days

Significance
From collateral-free loans and considerate repayment terms to equity infusion and e-market linkages across the MSME board, the govt has announced various measures to uplift the sector. MSMEs, in turn, employ ~11 crore people. Ergo, the unemployment issue will be solved to an extent.

Likewise, other sectors would also receive help. All these points go on to show that the government is leaving no stone unturned in aiding economic revival. Besides, it is working on easing the tense situation for us citizens. Coming to think of it, the ‘Atmanirbhar Bharat Abhiyan’ is indeed achievable, provided the 20 lakh crore-economic package is executed well.