New job scheme highlight of Nirmala's fresh stimulus package

New Delhi: Finance Minister Nirmala Sitharaman on Thursday announced a new job creation scheme by giving subsidy to those establishments that make new hires. The subsidy would be to cover for retirement fund 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 would 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.

Rs 65,000-crore fertilizer subsidy

Sitharaman 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.

Rs 18,000cr additional outlay for urban housing scheme

The Finance Minister announced a Rs 18,000 crore additional outlay for the urban housing scheme to help complete real estate projects that would create jobs and boost the economy.

She said the Rs 18,000 crore would be provided over and above the Budget Estimates for 2020-21 for the Prime Minister Awas Yojana (Urban) through additional allocation and extra budgetary resources.

This is over and above Rs 8,000 crore already provided this year.

She said the move would help start work on 12 lakh houses as well as complete 18 lakh houses. This would create 78 lakh new jobs as well as demand for steel and cement.

Announcing support for construction and infrastructure, she said Earnest Money Deposit (EMO) and performance security requirements will be relaxed for government tenders.

Performance security on contracts will be reduced to 3 per cent instead of 5 to 10 per cent. This would be extended to ongoing contracts which are free of disputes.

It would also be extended to public sector enterprises, she said, adding states will also be encouraged to adopt the same.

Earnest money deposit (EMD) will not be required for tenders and will be replaced by bid security declaration.

These relaxations will be given till December 31, 2021, she said, adding the move would give relief to contractors by reducing locking up of capital and cost of bank guarantees.

'Economy on recovery path' 

Sitharaman said the Indian economy is witnessing a strong recovery after a long and strict lockdown.

She said macro-economic indicators are pointing towards recovery. COVID-19 active cases have declined from over 10 lakh to 4.89 lakh with case fatality rate (CFR) at 1.47 per cent, she said.

Giving out details of recovery, she said composite purchasing managers index (PMI) rose to 58.9 per cent in October versus 54.6 per cent in the previous month, registering strongest increase in output in close to nine years.

Energy consumption growth trended higher in October at 12 per cent year-on-year, while Goods and Services Tax (GST) collections have grown 10 per cent to over Rs 1.05 lakh crore.

Daily railway freight tonnage grew by an average 20 per cent year-on-year versus 12 per cent, she said adding bank credit has improved 5.1 per cent.

Also, foreign direct investment (FDI) inflows in April-August at USD 35.37 billion has seen a 13 per cent rise on a year-on-year basis.

RBI has predicted a strong likelihood of Indian economy returning to positive growth in Q3 2020-21, ahead by a quarter from the earlier forecast, she said adding prominent economists have suggested that the rebound is not only due to pent up demand but also due to strong economic growth.