FM stimulus package includes measures to benefit real estate

Finance Minister Nirmala Sitharaman on November 12 announced the long-awaited stimulus package ahead of Diwali.

The FM rolled out 12 stimulus measures to boost employment in the formal and informal economy, boost housing infrastructure, enhancing ease-of-doing business and extending the deadline for the Credit Line Guarantee Scheme, etc.

The address came a day after the Government announced new production-linked incentives under another Rs 2 lakh crore PLI scheme for 10 major manufacturing sectors. The Government also concentrated on announcing some fresh projects, collaterally boosting employment in the country.

Sitharaman announced an additional outlay of Rs 18,000 crore for PMAY Urban, which will help ground 12 lakh houses and complete 18 lakh houses. The move will create additional 78 lakh jobs and improve production and sale of steel and cement, resulting in a multiplier effect on the economy, she said.

For primary residential real estate sales, she announced relief on the difference between circle rate and agreement value up to 20 pc vs 10 pc earlier. Income tax relief for developers and homebuyers has also been announced.

For support to construction and infrastructure, performance security on contract will be reduced to 3 pc instead of 5 pc. Earnest Money Deposit will not be required for tenders and will be replaced by Bid Security Declaration. Relaxations will be given till December 31, 2021.

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The following are the other highlights from the FM’s announcement:

-Rs 900 crore provided for COVID Suraksha Mission for research and development of the Indian COVID-19 vaccine to the Department of Biotechnology

– Rs 3,000 crore will be given to EXIM Bank for promotion of project exports through Lines of Credit under IDEAS Scheme.

–An additional outlay of Rs 10,000 crore will be provided for PM Garib Kalyan Rozgar Yojana in the current financial year, to boost rural employment.

– Rs 65,000 crore to be provided for subsidised fertlisers. This will help 140 million farmers.

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– Rs 1.46 lakh crore boost for Aatmanirbhar Manufacturing Production-linked incentive for 10 champion sectors.

–Guaranteed credit support for 26 stressed sectors identified by the Kamath Committee. Original ECLGS had one year of moratorium and 4 years of repayment, the new scheme will have 1-year moratorium and 5 years of repayment.

–-The existing Emergency Credit Line Guarantee Scheme extended till  March 31, 2021.

-If new employees of requisite number are recruited from October 1, 2020 to June 30, 2021, the establishments will be covered for the next two years

-Every EPFO-registered organisation – if they take in new employees or those who had lost jobs between March 1 and September 30 – these employees will get benefits.

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–Establishments registering with EPFO after the commencement of scheme to get subsidy for all new employees. The scheme will be in operation till June 30, 2021.

-Pradhan Mantri Rozgar Protsahan Yojana was implemented up to 31.03.2019. It had covered all sectors and is expected to run for three years. So even if someone joined the scheme on 31.03.2019, they would be covered under that existing scheme from then three years

–Atmanirbhar Bharat 3.0: The Finance Minister announced new job scheme called Atmanirbhar Rozgar Yojana to create jobs in the country. The new scheme will be effective from October 1, 2020

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