Finance Minister Nirmala Sitharaman on Thursday announced a Rs 900 crore grant to the Department of Biotechnology for COVID-19 vaccine research. She said the grant does not cover the actual cost of vaccine and distribution expenses, which will be made separately as and when the vaccine is available.
She also said that Rs 10,200 crore additional budget outlay will be provided towards capital and industrial expenditure for domestic defence equipment, industrial incentives and infrastructure and green energy.
This came as the Finance Minister made a series of stimulus package announcements, calling them Aatmanirbhar Bharat 3.0.
The FM also announced a new job creation scheme by giving subsidy to those establishments that make new hires. The subsidy would be to cover for EPFO contributions by employees as well as employers for two years, she said. Employees contribution (12 per cent of wages) and employer's contribution (12 per cent of wages) totalling 24 per cent of wages would be given to establishments for two years, she said.
Under the Aatmanirbhar Bharat Rozgar Yojana, every Employees' Provident Fund Organisation (EPFO) registered establishment taking new employees would get this subsidy. The scheme will cover any new employee joining employment in EPFO-registered establishment on monthly wages less than Rs 15,000.
It would also cover EPF members drawing monthly wages of less than Rs 15,000, who made an exit from employment during COVID-19 pandemic from March 1, 2020 and is employed on or after October 1, 2020. The scheme will cover establishments registered with EPFO if they add new employees compared to the reference base of employees as in September 2020.
The condition would be adding a minimum of two new employees for establishments with up to 50 employees. Those establishments with more than 50 employees, would have to give a minimum of five new jobs. The scheme would be operational till June 30, 2021.
As part of the stimulus package, the emergency credit guarantee line scheme has been extended till March 31, 2021 and an additional credit up to 20% of outstanding loans as on Feb 29, 2020 will be available as well.
In addition, a credit guarantee support was also announced for 26 stressed sectors offering 100% guaranteed collateral free additional credit.
Real Estate
In a bid to boost housing sales, she also announced an increase in the permitted differential between the circle rale and the agreement value of housing units to 20 per cent from the current mandated limit of 10 per cent till June 30.
The increase in differential will be applicable in residential units of value up to Rs two crore. It will help in reducing the tax liability as tax will be applicable on lower value of residential units.
Section 43CA of IT Act restricts differential between circle rate and the agreement value at 10 per cent. However, prices may actually be lower than that, and the restriction curbs sale of housing units.
Sitharaman said that the decision has been taken to boost sales at a time when demand is low and inventories have piled up. The income tax relief provides incentive to the middle class to buy homes, she said.
Fertilizer subsidy
FM also announced a Rs 65,000-crore fertilizer subsidy for farmers as part of her stimulus package to boost the economy. She said Rs 65,000 crore is being provided to ensure adequate availability of fertilisers to farmers and to enable timely accessibility of fertilisers in the upcoming crop season.
She said an additional outlay of Rs 10,000 crore will be provided for PM Garib Kalyan Rozgar Yojana in the current financial year. This, she said, will accelerate growth of the rural economy.
Sitharaman further said, Rs 3,000 crore will be released to EXIM Bank for promotion of 'Project Exports' through lines of credits. EXIM Bank extends lines of credits (LOC) on behalf of the government of India as assistance to developing countries under Indian Development and Economic Assistance Scheme (IDEAS) Scheme.