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How the Modi Government Delivered on Economic Policies Announced in Budget 2020

2020 is a year that will undoubtedly get registered in history books. A pandemic of a proportion not seen by humanity in over a century hit the world. As countries the world over enforced curfew to prevent the spread of disease, India also had to announce an unprecedented but necessary lockdown.

These unprecedented events took place a little after a month of announcing the Union budget, with spending for year planned and spelt out. Nevertheless, the government has come up with more than 5-6 economic packages since then to alleviate the economic distress caused to the pandemic and lockdowns.

Now in a unique exercise before 2021 Budget, Finance ministry is informing the citizens of the country the progress of economic decisions announced last year.

Easing the Lives and Respecting the Taxpayers
  • Finance Minister’s announcement about the introduction of a taxpayer’s charter which clearly defines the rights of tax payers and provide hassle free courteous services to them shows the promise being fulfilled.
  • Faceless assessment of Income tax announced in budget 2020 has been implemented. This has made assessment procedure fair, transparent, easy to comply with and free from potential bias. There is no more physical interface or visits to the tax office.
  • Faceless Appeals for assessment has been instituted. This has incorporated features like e-allocation, e-submissions, e-hearing and e-Review which has made tax compliance easier, while also ensuring an objective, fair and just order being passed.
More Strength to Farmers
  • Kisan Rail Announced in Budget 2020 has seen spectacular success on implementation. More than 120 trips of Kisan Rail with refrigerated coaches have been run in 5 months, with more than 34,000 tons of produce being transported. This has reduced the cost of transportation of produce to farmers and reduced wastage thereby boosting their income
  • While 585 markets were integrated into e-NAM (National Agricultural Market) by March 2018, another 415 were integrated with E-NAM by May 2020. A total of 175 commodities are available for trade on e-NAM currently.
  • 5 crore farmers have been provided concessional credit boost of over ₹2 lakh crore via Kisan Credit Cards. This has given big liquidity boost to farm sector and helped farmers escape the clutches of moneylenders.
  • Under the AatmaNirbhar Bharat Package, it was announced that farmers will ₹30,000 crore as Additional Emergency Working Capital Funds. ₹25,000 crore has been disbursed under this facility already. This was over and above ₹90,000 crore provided by NABARD.
Shoulder of Support to NBFCs
  • To help the MSME sector tide over the economic distress due to pandemic induced lockdown, Government announced Collateral free Guaranteed loans upto ₹3 lakh crore for MSMEs. ₹2.1 lakh crore has been sanctioned to more than 90 lakh enterprises and MSMEs so far giving crucial working capital to them.
  • Government expanded the scope of Loan guarantee to include the 26 stressed sectors identified by the KV Kamath Committee and healthcare sector. This has provided relief to stresses sectors like Auto Component, Construction, Gems & Jewellery, Hotel and Restaurants, Iron & Steel, Real Estate, Textiles, etc by helping entities sustain employment and meet liabilities.
Providing Maximum Support to NBFCs
  • Special liquidity Scheme for Non-Banking Finance Corporations and Housing Finance Institutions was announced to improve liquidity and prevent systemic risks in financial sector. Under this ₹7,125 crore has been disbursed by way of 28 instruments to over 23 NBFCs/HFIs.
  • Public sector banks have purchased portifolio of over ₹23,000 crore from NBFCs injecting crucial liquidity into them. Adequate liquidity to NBFCs is essential to ensure adequate lending is available to MSMEs and individual borrowers.

These measures which have significantly eased lives of tax payers, farmers, employment generating MSME’s and liquidity providing NBFCs shows that Modi government follows through on its promises made and is working 24/7 to ensure a prosperous, poverty free India.