Finance Minister Nirmala Sitharaman on Thursday said the Indian economy is witnessing a strong recovery after a long and strict lockdown. Addressing a press conference to announce more stimulus measures to boost growth, she said macro-economic indicators are pointing towards recovery.
Covid-19 active cases have declined from over 10 lakh to 4.89 lakh with case fatality rate (CFR) at 1.47 per cent, she said. Giving out details of recovery, she said composite purchasing managers index (PMI) rose to 58.9 per cent in October versus 54.6 per cent in the previous month, registering strongest increase in output in close to nine years. Energy consumption growth trended higher in October at 12 per cent year-on-year, while Goods and Services Tax (GST) collections have grown 10 per cent to over Rs 1.05 lakh crore. Daily railway freight tonnage grew by an average 20 per cent year-on-year versus 12 per cent, she said adding bank credit has improved 5.1 per cent.
Also, foreign direct investment (FDI) inflows in April-August at $35.37 billion has seen a 13 per cent rise on a year-on-year basis. RBI has predicted a strong likelihood of Indian economy returning to positive growth in Q3 2020-21, ahead by a quarter from the earlier forecast, she said, adding prominent economists have suggested that the rebound is not only due to pent up demand but also due to strong economic growth.
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. Till now, only 10 per cent difference between the circle rate and the agreement value was allowed.
To boost residential real estate sector, she said the differential has now been increased to 20 per cent for period up to June 30, 2021 for only primary sale of residential units of value up to Rs 2 crore. “This measure will reduce hardships faced by both home-buyers and developers and help in clearing the unsold inventory,” she said.
The finance minister also announced a Rs 65,000-crore fertilizer subsidy for farmers as part of her stimulus package to boost the economy. She said Rs 65,000 crore is being provided to ensure adequate availability of fertilisers to farmers and to enable timely accessibility of fertilisers in the upcoming crop season. She said an additional outlay of Rs 10,000 crore will be provided for PM Garib Kalyan Rozgar Yojana in the current financial year. This, she said, will accelerate growth of the rural economy. Sitharaman further said, “Rs 3,000 crore will be released to EXIM Bank for promotion of ‘Project Exports’ through lines of credits. EXIM Bank extends lines of credits (LOC) on behalf of the government of India as assistance to developing countries under Indian Development and Economic Assistance Scheme (IDEAS) Scheme.”
Apart from this, Sitharaman spoke about Rs 900 crore provided by Covid Suraksha Mission for research and development of the Indian Covid-19 Vaccine to department of bio-technology.
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