The government is organizing a package of incentives and direct, immediate assistance in areas such as hospitality and Medium, Small and Micro Enterprises (MSME), which are India’s largest workers and affected by COVID-19, said sources familiar with official talks.
Negotiations on the package are still in its infancy but in this case, the government is less likely to announce long-term policy announcements from a source.
Preliminary discussions suggest that the incentive package may have three components.
First, immediate relief from the most affected sectors such as hospitality, MSME, housing and buildings. Sources said the government tank NITI Aayog favors specific promotions such as wage subsidies, easy loans and tax cuts for medium and small hotel owners.
Also read : RBI Annual Report: Allocation of Rs 2,000 Distributed Notes falls to FY21
The second factor would be to restart some of the systems used in the first wave of the epidemic. Aatm Nirbhar Bharat Rozgar Yojna is likely to encounter some changes. Under the program, institutions seeking new employment were provided with specialized EPF funding from central government.
The Emergency Credit Line Guarantee Scheme (ECLGS) for MSMEs may also be restructured with certain changes in circumstances, according to sources. Under this program, MSMEs receive loans without collaterals. Pradhan Mantri Gareeb Kalyan Yojna, who can be given less than 5 kg free, can be increased.
A third aspect of the proposed relief package would be a special focus on the informal sector. Government can set up a dedicated website to directly support employees in the organized sector if necessary.
Also read : Sun Pharmaceutical Q4 net profit brings more than double Rs 894.15 crore
NITI Aayog and the departments of finance, trade and industry are in discussions with stakeholders on the proposed package, and are trying to assess the losses identified by the sectors identified in the second phase of COVID-19. Further announcements of encouragement are expected as countries begin to lower their limits during the second wave of the epidemic.
