Mega stimulus package

Anew slogan, ‘Be vocal about local’, has been added by the Prime Minister to his long list of aspirational-inspirational repertoire. How far it goes in infusing the much-required dynamism in the Covid-hit business and industry is the big question. For long, the low share of manufacturing in India’s GDP as compared to China has been seen as a huge weakness. So, while the country witnessed high growth numbers over the years, the job opportunities created as a result fell far short. The pandemic has only accentuated the serious problem. Hence, PM Modi’s strong pitch for use of products manufactured in the country and self-reliance could not be more timely.

In a mega stimulus package, the Finance Minister has announced measures to restart the economy, including Rs 3 lakh crore collateral-free automatic loans for MSMEs, revising upwards the investment limit, introducing an additional criteria of turnover and no global tender for government procurement up to Rs 200 crore. Clearance of all pending payments is another big takeaway. The statutory PF contribution has been slashed by 2 per cent to increase the take-home salary. The 25 per cent cut in tax deducted at source for non-salary payments is also a huge relief. A six-month extension has been given to government contractors to finish projects.

It is an undeniable fact that the drive to push manufacturing has met with limited success. The much-touted ‘Make in India’ has not lived up to potential. Aware of the ground reality, PM Modi has made clear his commitment to remove all domestic hurdles before manufacturing units and attract from China the global value chain. The vigour and hope reflected in the speech have to be translated into recognisable action. The first tranche of the package would soothe frayed nerves, but the road ahead is long. Forget about adding, will it bring back jobs? Is it a booster shot or a survival kit for the industry?