The Centre will help create affordable rental housing for the urban poor and provide relief worth ₹1,500 crore to small businesses through an interest subvention scheme, apart from extending credit for street vendors, farmers, and middle-class housing .
Apart from free food for migrant workers, these are the major highlights of the second tranche of the Atmanirbhar Bharat Abhiyan stimulus package, announced by Finance Minister Nirmala Sitharaman on Thursday.
Noting that migrant workers and other urban poor face difficulties in finding affordable housing, the Finance Minister said a scheme to build rental housing complexes through public private partnership mode would be launched under the existing Pradhan Mantri Awas Yojana (PMAY) scheme. Both public and private agencies will be incentivised to build rental housing on government and private land, while existing government housing will be converted into rental units.
The credit linked subsidy scheme for lower middle class housing under PMAY will also be extended by one year to March 2021, and is likely to benefit 2.2 lakh more families, said Ms. Sitharaman, expressing the hope that this would also create jobs and stimulate demand for the steel, cement and construction industries.
Street vendors who have been hit hard by the lockdown will be given access to easy credit through a ₹5,000 crore scheme, which will offer ₹10,000 loans for initial working capital.
The scheme will be launched within a month and will benefit 50 lakh vendors, said the Finance Minister.
Small businesses who have taken loans under the MUDRA-Shishu scheme, meant for loans worth ₹50,000 or less, will receive a 2% interest subvention relief for the next year, which will cost the government ₹1,500 crore.
The Centre plans a drive to enrol 2.5 crore farmers who are not yet part of the Kisan Credit Cards scheme, along with fish workers and livestock farmers, and provide them with ₹2 lakh crore worth of concessional credit. NABARD (National Bank for Agriculture and Rural Development) will also extend additional refinance support worth ₹30,000 crore to rural banks for crop loans, Ms. Sitharaman said.
“The only fiscal outlay in today’s announcements are the ₹3,500 crore for food grains to migrants and ₹1,500 crore for the MUDRA loanees. So only ₹5,000 crore is actually coming from government coffers, while the rest are credit-based measures,” said Himanshu, an economist at Jawaharlal Nehru University’s Centre for Economic Studies and Planning.
Terming the government’s approach as “stingy and half-hearted”, he noted that at a time when demand is down, any moves to provide liquidity are not going to help, adding that putting cash in people’s pockets would have been a better approach.
“Banks are parking money with the RBI (Reserve Bank of India), so the problem is not liquidity, but rather the appetite of people to take credit at this time,” he said. “Effectively, the burden of revival has been passed on to the people most affected by the lockdown,” he added.