FM Nirmala Sitharaman Says Indian Economy Shows 'Strong Recovery'


She said, the size of the stimulus being provided by the government as part of the 12 announcements, amounts to 2 lakh 65 thousand crore rupees.

The scheme would cover entities in 26 stressed sectors identified by the Kamath Committee plus healthcare sector with credit outstanding of above Rs 50 crore and up to Rs 50 crore as on February 29, 2020.

She also said that bank credit has grown by 5.1 per cent on a year-on-year basis.

"It is heartening to note that despite fiscal constraints, the government chose to hasten the recovery process by spending an additional Rs 2.65 lakh crore, thus taking the cumulative fiscal stimulus (till date) to Rs 17.2 lakh crore or 9 per cent of GDP", said Uday Kotak, President, CII.

"We expect that the announcement will help generate jobs, oil the engine of the economy", said Naveen Kulkarni, chief investment officer at Axis Securities.

"This will give a big boost to the economy, investment, exports and job creation".

The Centre will provide 12 per cent of the contributions of both employers and the employee for establishments with up to 1,000 employees.

Moreover, in a decision that will stand to benefit home buyers and real estate developers, Sitharaman announced relaxations in income tax rules to allow sale of primary residential units of up to Rs 2 crore value below the circle rate.

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Sitharman announced a Rs 900 crore grant to the Department of Biotechnology for COVID-19 vaccine research.

Tax relief on sale of housing units. In addition they will get a one-year moratorium on loans as well as four more years to repay borrowings, Sitharaman said. She further informed that more than one lakh 43 thousand crores rupees have been sanctioned to the farmers through Kishan Credit Card.

"In a significant demand booster for the residential real estate sector, the govt has decided to make amendments in the Income Tax Act to help home-buyers as well as developers", said Sitharaman. So far, Rs 73,500 crore has been already spent. "This measure will reduce hardships and help in clearing the unsold inventory", Sitharaman said.

On the Covid-19 pandemic, the Finance Minister said, India effectively dealt with the pandemic which resulted in a decline in the number of active cases and mortality rate. He said "recognition of real estate as a core sector, creating ancillary industry demand and employment, and enhanced Pradhan Mantri Awas Yojana - Urban allocation, will boost the housing demand in the country".

Besides, to help it raise money, the government will infuse Rs 6,000 crore equity in NIIF Debt Platform. "The continuous improvement in forward looking RBI indices of consumption and business sentiment for the next year augurs hope of a strong economic rebound", it had said in its report for October.

The Indian economy has recovered from its worst-ever contraction of 24 per cent in the April-June quarter but will end up shrinking by close to 10 per cent in the fiscal year to March 2021.

The International Monetary Fund (IMF) has forecast that the Indian economy will shrink by 10.3 per cent in the year to March.