HCS 2021 Exam HCS Mains Atmanirbhar Bharat Abhiyan
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HCS 2021 Exam HCS Mains Atmanirbhar Bharat Abhiyan

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HCS 2021 Exam HCS Mains Atmanirbhar Bharat Abhiyan

Atmanirbhar Bharat Abhiyan

  • Atmanirbhar Bharat Abhiyan (Self-reliant India Mission) is a campaign launched by the Central Government in four tranches which included Rs. 20 lakh crore economic stimulus package and a number of reform proposals.
  • The intended objective of this plan is two-fold. First, interim measures such as liquidity infusion and direct cash transfers for the poor will work as shock absorbers for those in acute areas. Second, long-term reforms in growth-critical sectors to make them globally competitive and attractive.

According to the Prime Minister, a self-reliant India should stand on 5 pillars:

  • Economy
  • Infrastructure
  • 21st century technology driven arrangements and system
  • Demand
  • Vibrant Demography
  • The package will focus on land, labour, liquidity and laws.
    • These reforms include:
  • supply chain reforms for agriculture
  • rational tax system
  • simple and clear laws
  • capable human resource
  • a strong financial system
  • These reforms are expected to promote business, attract investment and further strengthen Make in India.


Economic Stimulus - I:

  • The first tranche includes both liquidity financing measures and credit guarantees for businesses, especially Micro, Small and Medium enterprises (MSMEs).

Key points of Economic Stimulus-I:

Salaried Workers and Taxpayers:

  • The rates of TDS and TCS were cut by 25% for the FY 2020-21.
  • The statutory Provident Fund payments were reduced from 12% to 10% for both employers and employees for 3 months.

NBFCs, Housing Finance Companies and Microfinance Institutions:

  • Many of these institutions serve the MSME sector financially and will be supported through a Rs. 30,000 crore investment scheme fully guaranteed by the Centre.
  • Further, an expanded partial credit guarantee scheme worth Rs. 45,000 crores was offered of which the first 20% of losses will be borne by the Centre.

Power Distribution Companies:

  • Power Distribution Companies will receive Rs. 90,000 crore liquidity injection to address their cash flow crisis.

Real Estate and Contractors:

  • Contractors (those dealing with the construction/ works and goods and services contracts) will get a six month extension for completion of work from all Central agencies and also get partial bank guarantees to ease their cash flows.
  • Registered real estate projects will get a six-month extension for registration and completion of Real Estate Projects under Real Estate (Regulation and Development) Act.

Global Tenders to be disallowed:

  • Global tenders to be disallowed in government procurement tenders upto Rs. 200 crores.

Liquidity Measures for MSMEs:

New Definition of MSMEs:

  • The definition of MSMEs has been expanded to allow for higher investment limits and the introduction of turnover-based criteria.
  • Earlier, MSMEs were defined on the basis of the limit of investment in machinery or equipment.
  • The ‘turnover’ is the more efficient way to identify MSMEs as it allow a lot of firms, especially in the service sector like mid-sized hospitals, hotels and diagnostic centres to be eligible for benefits as an MSME.

Infusion of Liquidity:

  • Instead of directly infusing money into the economy or giving it directly to MSMEs the government will offer credit guarantees for MSMEs.

Emergency Credit Line:

  • The collateral free loans worth Rs. 3 lakh crores will be available for MSMEs. It will ensure access to working capital to resume business activity and safeguard jobs for 45 lakh MSMEs.
  • The above measure is available for MSMEs that have an already outstanding loan of Rs. 25 crore or those with a turnover less than Rs. 100 crore.
  • The loans will have a tenure of 4 years and they will have a moratorium of 12 months.

Subordinate Debt Scheme:

  • The loans of amount Rs. 20,000 crore will be provided to MSMEs that were already categorised as “stressed” or struggling to pay back. In this, the government provides partial guarantees.

Equity Infusion:

  • Fund of Funds with corpus of Rs. 10,000 crores will be set up which will provide equity funding for MSMEs with growth potential and viability.


Economic Stimulus II:

  • The second tranche includes the short term and long-term measures for supporting the poor, including migrants, farmers, tiny businesses and street vendors.

Key Points:

Free Food Grains Supply:

  • Allocation of free additional food grains to all the States/ UTs (5 kg per migrant labourer and 1 kg chana per family per month) for two months (May and June 2020).
  • Migrant labourers not covered under National Food Security Act, 2013 or without a ration card in the State/ UT in which they are stranded at present.
  • The outlay of Rs. 35,00 crore will be borne by the Government.

One Nation One Ration Card:

  • 67 crore beneficiaries covering 83% of PDS population will be covered by National portability of Ration cards by August, 2020 and 100% National portability will be achieved by March, 2021.

Scheme for Affordable Rental Housing Complexes for Migrant Workers and Urban Poor:

  • Under this, the Central Government will provide ease of living at affordable rent.
  • Under this, Government funded houses in the cities will be converted into Affordable Rental Housing Complexes under PPP mode through concessionaires.

Interest Subvention for Shishu MUDRA loanees:

  • Government of India will provide interest subvention of 2% for prompt payees for a period of 12 months to MUDRA Shishu loanees who have loans below Rs. 50,000.
  • The current portfolio of MUDRA Shishu loans is around Rs. 1.62 lakh crore. This will provide relief of about Rs. 1,500 crore to Shishu MUDRA loanees.

Credit Facility for Street Vendors:

  • Under this scheme, a credit of Rs. 5,000 crore would be provided and 50 lakh street vendors would be benefitted.
  • Bank credit facilities for initial working capital up to Rs. 10,000 for each enterprise will be extended.

Extension of Credit Linked Subsidy Scheme:

  • The Credit Linked Subsidy Scheme for Middle Income Group (income between 6 and 18 lakhs) will be extended up to March 2021.
  • This will benefit 2.5 lakh middle income families during 2020-21 and will lead to investment of over Rs. 70,000 crore in housing sector.
  • This will create a significant number of jobs by giving a boost to the Housing sector and will stimulate demand for steel, cement, transport and other construction materials.

Creating employment using CAMPA Funds:

  • Approximately Rs. 6,000 crore of funds under Compensatory Afforestation Management & Planning Authority will be used.
  • The funds will be utilised in afforestation and plantation works, artificial regeneration, forest management, soil & moisture conservation works, forest protection, forest and wildlife related infrastructure development, wildlife protection and management etc.
  • Government will grant immediate approval to these plans which will create job opportunities in urban, semi-urban and rural areas and also for Tribals.

Additional Emergency Working Capital through NABARD:

  • NABARD will extend additional refinance support of Rs. 30,000 crore for meeting crop loan requirements of Rural Cooperative Banks and RRBs.
  • This refinance will be front-loaded and available immediately.
  • This is over and above Rs. 90,000 crore that will be provided by NABARD to this sector in the normal course.
  • This will benefit around 3 crore farmers, mostly small and marginal and will meet their post-harvest Rabi and current Kharif requirements.

Credit Boost to Kisan Credit Card Scheme:

  • It is a special drive to provide concessional credit to Pradhan Mantri Kisan Samman Nidhi beneficiaries through Kisan Credit Cards.
  • It will inject additional liquidity of Rs. 2 lakh crore in the farm sector.
  • 2.5 crore farmers will be covered and fisherman and animal husbandry farmers will also be included in this drive.


Economic Stimulus III:

  • The third tranche of the economic relief package focuses on agricultural marketing reforms.

Key Provisions:

Inter-state trade:

  • Plans to enact a central law to permit barrier-free inter-State trade of farm commodities and e-trading.
  • This will allow farmers to sell produce at attractive prices beyond the current mandi system.

Contract Farming:

  • Plans to ensure a facilitative legal framework to oversee contract farming.
  • This would provide farmers with assured sale prices and quantities even before the crop is sown and also allow private players to invest in inputs and technology in the agricultural sector.

Deregulating produce:

  • The Centre will be deregulating the sale of six types of agricultural produce, including cereals, edible oils, oilseeds, pulses, onions and potatoes by amending the Essential Commodities Act, 1955.
  • Stock limits will not be imposed on these commodities except in case of national calamity or famine or an extraordinary surge in prices. These stock limits would not apply to processors and exporters.

Agriculture infrastructure:

  • Investment of Rs. 1.5 lakh crore to build farm-gate infrastructure and support logistics needs for fish workers, livestock farmers, vegetable growers, beekeepers and related activities.


Economic Stimulus IV:

  • The final tranche focuses on the defence, aviation, power, mineral, atomic and space.
  • There is a huge emphasis on privatization.


  • Provisions for ban on import of some weapons and platforms to indigenise defense production.
  • There is a provision for a separate budget for domestic capital procurement. This would help reduce the defence import bill and encourage domestic production.
  • The FDI limit in defence manufacturing under the automatic route will be raised from 49% to 74%.
  • Ordnance Factory Boards would be corporatized and listed on the stock market to improve autonomy, efficiency and accountability.


  • The government monopoly on coal would be removed with the introduction of commercial mining on a revenue-sharing basis.
  • The private sector would be allowed to bid for 50 coal blocks. Private players would also be allowed to undertake exploration activities.


  • A level playing field for private players will be created in the space sector allowing them to use ISRO facilities and participate in future projects on space travel and planetary exploration.
  • The Government will ease geospatial data policy to make remote-sensing data more widely available to tech entrepreneurs with safeguards put in place.


  • Six more airports are up for auction on private-public partnership mode while additional private investment will be invited at 12 airports.
  • Measures to ease airspace restrictions have been announced which would make flying more efficient.
  • Rationalizing of the MRO (Maintenance, Repair and Operations) tax structure to make India an MRO hub.


  • Power departments/utilities and distribution companies in UTs would be privatized based on a new tariff policy to be announced.


  • Research reactors in PPP mode would be set up for the production of medical isotopes.
  • Measures to ease airspace restrictions have been announced which would make flying more efficient.
  • Rationalizing of the MRO (Maintenance, Repair and Operations) tax structure to make India an MRO hub.


  • Power departments/utilities and distribution companies in UTs would be privatized based on a new tariff policy to be announced.


  • Research reactors in PPP mode would be set up for the production of medical isotopes.


Impact of this Stimulus Package:

Primary Sector:

  • The measures (reforms to amend ECA, APMC, Contract Farming etc) announced for the agricultural and allied sectors are particularly transformative.
    • These reforms are steps towards the One Nation One Market objective and help India become the food factory of the world.
    • These would help in achieving the goal of a self-sustainable rural economy.
    • MGNREGA infusion of 40,000 crore may help in alleviating the distress of migrants after return to their villages.

Secondary Sector:

    • Given the importance of MSMEs for Indian economy, the Rs 3 lakh crore collateral-free loan facility for MSMEs under the package will help this finance-starved sector and thereby provide a kickstart to the dismal state of the economy.
    • Since the MSME sector is the second largest employment sector in India, this step will help to sustain the labour intensive industries and thereby help in leveraging India’s comparative advantage.
  • Limiting imports of weapons and increasing the limit of foreign direct investment in defence from 49% to 74% will give a much-needed boost to the production in the Ordnance Factory Board while reducing India’s huge defence import bill.

Tertiary Sector:

  • The newly launched PM e-Vidya programme for multi-mode access to digital online education provides a uniform learning platform for the whole nation which shall enable schools and universities to stream courses online without further loss of teaching hours.
  • Public expenditure on health will be increased by investing in grassroot health institutions and ramping up health and wellness centres in rural and urban areas.



Issues related to Liquidity:

  • The package of Rs 20 lakh crore comprises both fiscal and monetary measures, the latter being in the nature of credit guarantees and liquidity infusions into banks and other financial sector institutions rather than the economy per se.
  • Majority of the package is liquidity measures that are supposed to be transmitted by RBI to Banks and Banks to Citizens. The transmission wouldn’t be as smooth owing to inefficient transmission of monetary policy.

Lack of demand:

  • The lockdown lowered the aggregate demand and a fiscal stimulus is needed. However, the package by relying overwhelmingly on credit infusion to boost the economy has failed to recognise that investment will pick up only when people across income segments have money to spend.

Lack of Backward and Forward Linkages:

  • Unless the rest of the domestic economy is revived, the MSME sector may face a shortage of demand and its production may soon sputter to a close.

Burgeoning Fiscal Deficit:

  • Government claims that the stimulus package is around 10% of India’s GDP. However, financing it would be difficult as the government is worried about containing the fiscal deficit.

Difficulty in Mobilising Finances:

  • The government seeks a disinvestment to mobilise the finances for the plan.
  • However, the majority of Indian industries are already a bit debt-laden to take up the stake in PSUs.
  • Further, it is difficult to borrow the foreign markets as rupee with respect to dollar is all time low.


Steps to be taken:

Enhancing Demand:

  • The economic package for the country emerging out of the lockdown requires a stimulus enhancing demand across the economy.
  • The best way for this is to spend on greenfield infrastructure.
  • Infrastructure spending uniquely creates structures that raise productivity and extends spending power to the section of the population most affected by the lockdown, namely daily wage labourers.

Mobilising Finances:

  • For financing of the stimulus package, India’s foreign reserves stand at an all-time high which could be strategically used to finance its needs.
  • The rest may have to come from privatisation, taxation, loans and more international aid.

Holistic Reforms:

  • Any stimulus package will fail to reflect the trickle-down effect until and unless it is backed by reforms in various sectors.
  • Atma nirbhar plan should also encompass reforms in Civil services, Education, Skill and Labour etc.