FM: Third tranche of economic relief package to focus on agri sector

Nirmala Sitharaman. Picture/PTI

Finance Minister Nirmala Sitharaman on Friday said the third tranche of economic package will deal with giving relief to agriculture and allied industries. Speaking to media, she said the package would focus on infrastructure and building capacities in the agriculture and allied activities.

She said in the last two months several measures have been taken to support farmers, including minimum support price (MSP) purchases of Rs 73,300 crore during the two months of lockdown.
Also, Rs 18,700 crore in cash dole out under the PM Kisan Fund transfers have been done and Rs 6,400 crore of payment in crop insurance have been made.

Sitharaman said during the lockdown period, 560 lakh litre per day of milk was procured by cooperatives against daily sale of 360 lakh litres per day.

Total 111 crore litres extra procured ensuring payment of Rs 4,100 crore, she said adding a new scheme to provide interest subvention of 2 per cent per annum to dairy cooperative has been implemented.

The interest subvention will unlock Rs 5,000 crore additional liquidity, benefitting 2 crore farmers.

Prime Minister Narendra Modi earlier this week announced a cumulative package of Rs 20 lakh crore (nearly 10 per cent of GDP) to provide relief to various segments of the economy battered by coronavirus lockdown.

This included Rs 1.7 lakh crore package comprising free foodgrain and cash to poor for three months announced in March, and Rs 5.6 lakh crore stimulus provided through various monetary policy measures by the Reserve Bank of India (RBI).

Of the remaining, the government has made two tranches of announcements with a cumulative package of Rs 9.1 lakh crore, comprising largely of credit lines to smaller firms, concessional credit to farmers and support to shadow banking and electricity distributors.

Most of the first two tranches of the package are off-budget and the government cash outgo is limited to just Rs 16,500 crore on free foodgrain and affordable housing to migrant workers as well as limited tax relief and marginal dole to some companies on employee retrial benefits.
India had - beginning March 25 - imposed a three-week-long nationwide lockdown, the most far-reaching measure undertaken by any government to curb the spread of the pandemic.

The lockdown, which brought most of the economic activity to a standstill as factories and businesses shut while rendering thousands temporarily unemployed, has since been extended twice through May 17, with some relaxations to allow the resumption of economic activity.

According to estimates, the lockdown may have led to 12.2 crore people losing jobs in April and consumer demand evaporating.

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