Special Scheme to Boost Domestic Demand

[MoF Press Release/23.03.2021]

It is a continuous endeavour of the Government to introduce schemes and reforms to promote Ease of Doing Business, increase investments & GDP growth and providing boost to domestic demand with the ultimate objective of ushering in an inclusive growth and well-being of all the sections of the society.

This was stated by Anurag Singh Thakur, Union Minister of State for Finance & Corporate Affairs, in a written reply to a question in Rajya Sabha on 23 March 2021.

Giving more details, the Minister stated that the Government had announced a special economic and comprehensive package under Atma Nirbhar Bharat Abhiyan in Financial Year 2020-21 to combat the impact of the COVID-19 pandemic and to revive economic growth, which including other measures taken by RBI, amounts to Rs. 27.1 lakh crore (approx) i.e. more than 13% of India’s GDP. Also, to provide a major boost to Atma Nirbhar Manufacturing, Production Linked Incentives Schemes have been launched in FY 2020-21.

The Minister stated that the Union Budget 2021-22 has also announced a number of measures to support broad-based and inclusive economic development under six pillars listed as under:

a. Health and Well-being

b. Physical & Financial Capital and Infrastructure

c. Inclusive Development for Aspirational India

d. Re-invigorating Human Capital

e. Innovation and R&D

f. Minimum Government and Maximum Governance

The Minister stated the following steps that have also been taken to create a climate of investment and business and to boost domestic demand:-

i. A National Infrastructure Pipeline (NIP) of Rs 111 lakh crore for 6,835 investible projects in the infrastructure sector (expanded to 7,400 in Budget 2021) was launched in December, 2019, which to be implemented by 2025.

ii. An equity infusion of ₹6,000 crore has been approved by the Cabinet on 25.11.2020 in the National Investment and Infrastructure Fund (NIIF) Infrastructure Debt Financing Platform, so as to enable it to attract both debt and equity investors for infrastructure.

iii. A Bill for setting up of a Development Finance Institution (DFI) to provide, enable and catalyze infrastructure financing for long-term infrastructure projects has been approved by the Union Cabinet on 16.03.2021. An amount of ₹20,000 crore has already been allocated in Budget 2021 to capitalise the institution.

iv. A “National Monetization Pipeline” of potential brownfield infrastructure assets has been announced as a financing option for new infrastructure construction.

v. To give a push to social infrastructure and to provide support to core sector infrastructure, an updated Viability Gap Funding (VGF) scheme “Scheme for Financial Support to Public Private Partnerships (PPPs) in infrastructure” has been notified in December, 2020.

vi. A ₹12,000 crore interest-free 50-year loan to states for spending on capital projects.

vii. Announcement of LTC cash voucher and festival advance scheme for employees.

Giving more details, the Minister said the Budget Estimates (BE) for Department of Rural Development which were ₹1,20,147.9 crore in 2020-21 have been increased to ₹1,31,509.08 crore in 2021-22. In respect of Ministry of Skill Development and Entrepreneurship, the BE 2021-22 have been kept at ₹2,785.23 crore, against the BE of ₹3,002.21 crore in 2020-21. For all Centrally-Sponsored Schemes and Central Sector Schemes, compared to the BE 2020-21 of ₹3,39,894.53 crore and ₹8,31,285.06 crore respectively, the BE 2021-22 is ₹3,81,304.55 crore and ₹1,05,1703.41 crore respectively.