Highest Package In MSMEs: How Union FM Nirmala Sitharaman divided Rs 20 Lakh Crore Package Sector Wise

On Sunday, FM Nirmala Sitharaman listed measures worth Rs 20,97,053 crore including RBI measures and steps announced under Pradhan Mantri Garib Kalyana Package (PMGKP).

Break-In-of-Economic-Package Explained-Break-In-of-Economic-Package Nirmala-Sitharaman-Five-Tranches
In a push to over the COVID Crisis, PM Modi on Tuesday announced India's second stimulus package to give relief to the nation. Union Finance Minister Nirmala Sitharaman took 5 days to divide a whopping amount of Rs 20 lakh crore which is also a 10% of GDP. FM Sitharaman on Sunday announced the fifth and final trench of PM Modi's economic relief package. On Sunday, she listed measures worth Rs 20,97,053 crore including RBI measures and steps announced under Pradhan Mantri Garib Kalyana Package (PMGKP). Accordingly, on the fifth and final day of detailing the mega Rs 20 lakh crore economic package under the Centre's 'Self-Reliant India Movement', the minister gave the break-up of the package

So How FM Sitharaman Divided The Whopping Amount of Rs 20 Lakh Crore?

First Tranche:

On Wednesday, Union Finance Minister Nirmala Sitharaman announced the first tranche of an economic relief package whose primary focus was to uplift the sweeping distress in the Micro, Small and Medium Enterprises (MSMEs) sector that lies at the heart of the industrial ecosystem and employs an estimated 11 crore persons, including much of the country’s migrant workforce. While the 16 specific announcements announced in the first tranche cut across sectors that range from MSME and Non-Banking Finance Companies (NBFCs) to real estate and power distribution and the salaried, the overarching theme was that of infusing liquidity. And engineering a pass-through effect that ultimately puts more disposable funds in the hands of both entrepreneurs and employees.

Total – Rs 5,94,550 crore

Second Tranche:

The second tranche focused on the migrants' issue, who are affected most by the COVID crisis. Sitharaman unveiled three measures for the distressed migrant workers.  She announced the ‘One Nation One Ration card’ scheme under which migrants will be enabled to access Public Distribution System from any Fair Price Shop in the country by March 2021. This is part of the PM’s Technology-Driven System Reforms.

Migrant workers, who are neither National Food Security Act (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 free for two months, the Finance Minister said.

Punjab CM Captain Amarinder Singh criticised the move and asked FM Sitharaman to allocate the 1kg Chana (Chick Pea) from per family to per person. 

Total amount – Rs 3,10,000 crore

Third Tranche:

In the third tranche, the focus of FM Sitharaman shifted to agriculture sector and farmers. In the third tranche, most of the measures are either in place already or the government has been discussing these for several years. A total of  11 announcements were made in which three concern governance and administrative reforms, including amendment of the Essential Commodities Act (ECA), 1955, and agriculture marketing reforms through a Central law. These have been part of successive Union Budgets under the Modi government.


Apart from this, Sitharaman announced the setting up of a Rs 1 lakh crore Agri Infrastructure Fund; the formalisation of Micro Food Enterprises, with an outlay of Rs 10,000 crore; a vaccination drive against food and mouth disease among cattle; extension of the Operation Greens from tomatoes, onion and potatoes to all fruits and vegetables; upliftment for fishermen through the Pradhan Mantri Matsya Sampada Yojana; a Rs 15,000-crore Animal Husbandry Infrastructure Development Fund; Rs 4,000 crore for promotion of herbal cultivation; and a Rs 500 crore scheme to promote beekeeping.

Total amount – Rs 1,50,000 crore

Fourth Tranche:

The fourth tranche brought some big reforms. FM Sitharaman announced to raise the limit for foreign direct investment (FDI) for defence manufacturing from 49 to 74 per cent under the automatic route. Another big reform was the ending of the coal monopoly. The Rs 50,000 crore infrastructure development will be instituted for the evacuation of coal to help Coal India's (CIL) achieve the 1 billion tonnes output target by 2023-24, plus the coal produced from private blocks.

Six more airports have been identified for the second round of bidding for operation and maintenance on the public-private partnership (PPP) basis. The air space availability will also be eased to allow airlines save cost and passengers, flying time. For the power distribution business, the Minister said discoms in the Union Territories would be privatised. Rs 8,100 crore revamped-up viability gap funding scheme was also announced for social infrastructure projects.  A medical isotope producing research reactor will be set up under the PPP mode

Total Amount- Rs 48,100 crore

Fifth and Final Trench:

 Finance Minister Nirmala Sitharaman on Sunday listed all the measures and allocations made under the Rs 20 lakh crore economic package for the 'self-reliant India' programme, announced by Prime Minister Narendra Modi. On Sunday, she listed measures worth Rs 20,97,053 crore including RBI measures and steps announced under Pradhan Mantri Garib Kalyana Package (PMGKP). Accordingly, on the fifth and final day of detailing the mega Rs 20 lakh crore economic package under the Centre's 'Self-Reliant India Movement'.

On Sunday, FM Sitharaman announced an additional allocation of Rs 40,000 crore under the Mahatma Gandhi National Rural Employment Guarantee scheme (MGNREGS). In the Union Budget 2020-21, the government had allocated Rs 61,500 crore for MGNREGS, and the additional Rs 40,000 crore will be over and above this budget estimate.

This additional amount is expected to generate nearly 300 person days of employment in total. Significantly, the decision will aide scores of migrant workers who have left for their villages find employment. The biggest announcement was on the new Public Sector Enterprise Policy and opening up of all sectors to private players. 

Furthermore, the minister gave a major relief for businesses by easing insolvency norms. 

Total amount (4th and 5th tranche) – Rs 48,100 crore


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