In the latest stimulus package announced by the Finance Minister, priority was given to migrant labourers, farmers, and small businesses. Measures included free food grains and portability of ration cards for migrants, interest subvention and credit boosts for farmers and small businesses, and affordable housing schemes. The total stimulus package amounted to INR 3.16 trillion, although the actual fiscal cost will be lower, estimated at INR 35 billion for food grains for migrants and INR 15 billion for interest subvention on small loans. The targeted support aims to provide relief to those most impacted by the pandemic.

1. India: Targeted stimulus continues
• In the next tranche of measures announced by the Finance Minister today, migrant
labourers, agriculture and small businesses found priority
• From a longer-term perspective, affordable housing, both rental and owned, were
given incentives to stimulate demand
In a fresh tranche of measures announced by the Finance Minister, priority was accorded to
migrant labourers, urban poor, lower middle-income classes, and farmers. Given the
widespread distress seen among the poorer sections of society post the pandemic, the
measures appear well targeted.
Migrant labourers, who have faced a challenging time since the COVID pandemic caused a
lockdown affecting crores who lost their source of livelihood, were provided a modicum of
relief today. This came in the form of the Centre’s decision to distribute grains and pulses to
migrants who do not have valid documents to claim the same in the state where they are
situated.
An associated move, which is even more vital in a socio-economic context, is the portability
of ration cards across states (One Nation One Ration Card scheme). This has been a long-
standing ask, given that a vast majority of the Indian poor migrate away from their place of
birth in search of employment, and lose accompanying benefits. The need for portability of
benefits across states has been highlighted in past Economic Survey documents and has been
a key intervention we have been suggesting in our reports post the COVID pandemic.
Employment creation was also given a thought via utilisation of Compensatory Afforestation
Fund Management and Planning Authorities (CAMPA) funds by states. In April 2020, there
were reports of states wishing to borrow from their respective state CAMPA funds. These
CAMPA funds are mostly parked in Central Government securities and are estimated to be
worth over INR 500 bn at present. Resorting to CAMPA funds is cost-efficient for mineral-rich
states like Odisha as compared to investment in G-Secs.
For agriculture, NABARD will extend additional refinance support for crop loan requirements,
especially to help small and marginal farmers. PM-KISAN beneficiaries will also be able to avail
concessional credit through Kisan Credit Cards. These are vital in light of the fact that sowing
for the kharif crop will begin next month. Also, agriculture is expected to carry a heavier
burden to ensure some degree of growth in a year when most other sectors cannot perform
at potential.

2. Housing for migrants and the lower middle-class category found space in today’s docket. The
Government intends to launch a scheme under the PM Awas Yojana to enable migrants and
the urban poor to find affordable rental housing. This will be done via conversion of
Government funded housing which lies vacant, incentivising manufacturing units to develop
such houses, and incentivising state and Central government agencies to develop these units.
The Credit Linked Subsidy Scheme (CLSS) for the middle-income bracket (earning INR 0.6-1.8
Mn per year) has been extended to March 2021 to benefit 0.25 Mn families to find homes
during this fiscal year. The targeted investment is a substantial INR 700 bn. While the push for
affordable housing remains unabated, the challenged income streams this year may slow
down the take-off for this scheme in the immediate horizon of a few months.
A push toward digitisation has been enabled for street vendors, who will also get a liquidity
line of INR 50 bn. In a further stimulus to small businesses, an interest subvention has been
provided to the MUDRA-Shishu loan category (loan up to INR 50,000). Given that this category
typically consists of micro entrepreneurs who will mostly be struggling to repay their debts
this year given an expectedly huge shortfall in demand, this move is well-intended. In
conjunction with yesterday’s moves for MSMEs, a large segment will be covered by a number
of alleviation measures, which, if executed properly, will be beneficial.
The FM’s total package announced today amounts to INR 3.16 Tn, although the cash outgo
affecting the fiscal math would be much lower. This would include INR 35 bn targeted toward
distribution of food grains for migrants, as well as the provisioning of INR 15 bn as interest
subvention for MUDRA-Shishu loans.
Annexure: Schemes announced
Measures for Migrant workers
1) Free food grain Supply to Migrants for 2 months
• Migrants who are neither NFSA or State Card beneficiaries in the state they are
stationed will be provided 5 kg of grains per person and 1 kg Chana per family
per month for two months
• About 80 Mn migrants are expected to benefit.
• INR 35 bn will be spent on this intervention for 2 months, the cost of which will
be fully borne by Government of India
• State Governments responsible for implementation, identification of migrants
and full distribution and providing detailed guidelines.

3. 2) Technology Systems to be used enabling Migrants to access Public Distribution
System (Ration) from any Fair Price Shop in India by March 2021 - One Nation One Ration
Card
• This scheme will enable a migrant beneficiary to access Public Distribution
System from any Fair Price Shop in the country (Intra-State portability introduced
in 20 States)
• 670 Mn beneficiaries in 23 states covering 83% of PDS population will be covered
by national portability by August 2020
• 100% National portability will be achieved by March 2021
• All the States/UTs will complete full FPS automation by March 2021
3) Affordable Rental Housing Complexes (ARHC) for Migrant Workers / Urban Poor
Government will launch a scheme under PM Awas Yojana for migrant labour/urban poor to
provide ease of living at affordable rent by,
• Converting government funded housing in the cities into Affordable Rental
Housing Complexes (ARHC) under PPP mode through concessionaire.
• Incentivizing manufacturing units, industries, institutions, associations to develop
Affordable Rental Housing Complexes (ARHC) on their private land and operate;
and
• Incentivizing State Government Agencies / Central Government Organizations on
the similar lines to develop Affordable Rental Housing Complexes (ARHC) and
operate.
• Ministry will issue detailed guidelines.
Measures for MUDRA Loan:
• INR 15 bn Interest Subvention for MUDRA-Shishu Loans
• Loan moratorium has already been granted by RBI
• The current portfolio of MUDRA-Shishu loans is ~ INR 1.62 Tn (Maximum loan
amount of INR 50,000).
• Government of India will provide Interest subvention of 2% for prompt payees
for a period of 12 months.
• Relief of INR 15 bn to MUDRA-Shishu loanees
Measures for street vendors:
INR 50 bn Special Credit Facility for Street Vendors
• Government will launch a special scheme within a month to facilitate easy access
to credit to street vendors.
• Initial working capital up to INR 10,000.

4. • Digital payments will be incentivized through monetary rewards and enhanced
working capital credit would be made available for good repayment behaviour.
• Will support nearly 5 Mn street vendors and provide liquidity of INR 50 bn
Measures for tribal workers:
INR 60 bn employment push using CAMPA funds
• Compensatory Afforestation Management & Planning Authority (CAMPA) set up
under Compensatory Afforestation Fund Act, 2016
• Plans worth INR 60 bn will be approved shortly.
• Funds to be used by State Governments for-
• Afforestation and plantation work, including in urban areas
• Artificial regeneration, assisted natural regeneration
• Forest management, soil & moisture conservation works
• Forest protection, forest and wildlife related infrastructure development,
wildlife protection and management etc.
Measures for small farmers
1) INR 300 bn Additional Emergency Working Capital Funding for farmers through
NABARD
• NABARD will extend additional refinance support of INR 300 bn for crop loan
requirement of Rural Co-op Banks & RRBs.
• This is over and above INR 900 bn to be provided by NABARD through the normal
refinance route during this year
• Front-loaded on-tap facility to 33 State Co-operative banks, 351 District Co-
operative banks and 43 RRBs available on tap based on their lending.
• To benefit around 30 Mn farmers - mostly small and marginal farmers.
• To meet post-harvest (Rabi) & current Kharif requirement in May/June
2) INR 2 Tn Concessional credit boost to 25 Mn farmers through Kisan Credit Cards
• Special drive to be undertaken to provide concessional credit to PM-KISAN
beneficiaries through Kisan Credit Cards. Fishermen and Animal Husbandry
farmers will also be included in this drive.
• 25 Mn farmers will be covered and will benefit from credit flow of about INR 2 Tn
3) INR 700 bn boost to housing sector and middle-income group through extension of
CLSS

5. • Credit Linked Subsidy Scheme for Middle Income Group (Annual Income: INR
0.6–1.8 Mn) was operationalized from May 2017.
• CLSS was extended up to 31st March 2020
• Scheme has benefitted 0.33 Mn middle class families so far.
• Government will extend the CLSS Scheme up to March 2021.
• 0.25 Mn middle income families will benefit during 2020-21
PM Atmanirbhar Bharat Abhiyan - Part 2
(INR bn) Allocation
Food grain supply to migrants 35
Interest subvention for MUDRA 15
Credit facility for street vendors 50
Boost to housing sector & middle income through extension of CLSS 700
CAMPA funds employment for tribal workers 60
Emergency working capital fund for farmers through NABARD 300
Kisan credit cards 2000
Total 3160
Details of RBI and government stimulus (INR Tn)
Total stimulus in 2020 (A) 20.0
Total measures by RBI (B) 5.2
March 27th policy 3.7
CRR cut 1.4
TLTRO 1.0 1.0
Marginal standing facility 1.4
April 17th 1.0
TLTRO 2.0 0.5
Refinance facilities 0.5
SLF-MF (April 27th) 0.5
PM Garib Kalyan (C) 1.7
PM Atmanirbhar Bharat Abhiyan 1 (D) 5.9
PM Atmanirbhar Bharat Abhiyan 2 (E) 3.2
Other measures (health and special refund) (F) 0.3
Balance stimulus to be announced (A-B-C-D-E-F) 3.6
Source: Ministry of Finance, RBI
Compiled by- Rutuja Chudnaik
B. Com (Accounts and Finance, M. Com (Advanced Accountancy), P.G.D.M. (Finance
Management), Advanced Diploma in Business Administration