Decoding 20L Crore Package in less than 15 Minutes (Part 2)


3 min read
Decoding 20L Crore Package in less than 15 Minutes (Part 2)


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Third tranche – Rs 1,50,000 crore (Agriculture and allied sectors)


Major Highlights:

1) 1 Lakh Crore to Agri Infrastructure fund: FM announced Rs 1 lakh crore agriculture infrastructure fund for farm-gate infrastructure including using it for setting up cold chains and post-harvest management infrastructure.

Example: If any fishermen needs cold storage facility to store the fish for longer term so that they can sell it to big companies like Godrej Agrovet further at good rates. Then it will directly benefit the fisherman.

Bifurcation: this included Rs 20,000 to be provided to fishermen through Pradhan Mantri Matsya Sampada Yojana, and Rs 10,000 crore to formalize micro food enterprises. Rs 4,000 crore for herbal cultivation, a Rs 15,000 crore Animal Husbandry Infrastructure Development Fund, Rs 500 crore for bee-keeping related infrastructure development were other packages announced by the minister.

Fourth and fifth tranches – Rs 48,100 crore (Privatization, FDI limit, Airlines, MGNREGA, IBC)

Major Highlights:

1) Privatization: FM announced the commercial mining in the coal sector (bad news for Coal India) and privatizing discoms in metros to streamline their functions for better accountability. The minister also talked about private participation in the space sector along with coming up with a policy for private players.

2) FDI limit in defence manufacturing sector under the automatic route will be raised from 49% to 74%. We will be able to manufacture good defense equipments in India and defence import bill will be reduced.

3) Crisis-hit airlines to save Rs 1,000 crore as govt frees up airspace (I will discuss it in detail in a separate article)

4) FM allows top 100 universities to start online courses by May 30.

5) Good news for Stock Market Investors Direct listing of securities by Indian Public companies in permissible foreign jurisdiction will be allowed to list their securities in a much ease out form.  

6) MGNREGA: FM allocated an additional Rs 40,000 crore for the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) for job creation in India’s hinterland. The government had earlier allocated Rs 61,000 crore in the budget for this financial year. So, 61,000 + 40,000 = 101,000 Cr Rs.

7) IBC Code: For improved ease of doing business among MSMEs, FM extended the initiation period of fresh insolvency proceedings against MSMEs by six months to up to one year along with excluding Covid-19 related debt from the ‘default’ category under the .

Is this it really worth 20 Lakh Cr?

Answer: NO ( As per Barclays, ICRA)

"Accounting for the support measures unveiled on Sarturday (Rs 8,100 crore), and today (Rs 40,000 crore), we estimate that the government's fiscal support programme totals Rs 21 lakh crore, which includes Rs 8 lakh crore of measures announced by the RBI. However, we estimate that the actual fiscal impact on the budget will be only Rs 1.5 lakh crore (0.75% of GDP), based on our calculations and assumptions made during the series of announcements,"  - Barclays

So the summary goes here

That's all.

Don't worry, everything is covered.

Thanks!

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Akshay Seth
Research Analyst (SEBI Regd.)
Linkedin | akshay.equity@gmail.com

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