NARENDRA MODI ANNOUNCES 20 LAKH CRORE ECONOMIC PACKAGE.IS IT BENEFICIAL FOR THE NATION?


NARENDRA MODI ANNOUNCES 20 LAKH CRORE ECONOMIC PACKAGE .IS IT BENEFICIAL FOR THE NATION?

Narendra Modi Ji Announces 20 Lakh Crore Package in 'Maan ki Baat'.


Our Finance Minister divulged the details of the package part by part over the next five days.To understand 20-lakh crore package you have to first understand the 2 kinds of policies in Economics-monetary policies and fiscal policies.

Monetary Policies

Monetary Policies are framed by country's central bank.Monetary Policies are decided by RBI.This basically involves fluctuating the interest rates.Changing  the supply of money to control inflation.Another one is Fiscal Policies.

Fiscal Policies

This Policy is made by the government.The Government alters its spending-which areas to spend more ,alters the tax rates.

And the government formulates fiscal policies.8 lakh crore out of 20 lakh crore is a liquidity infusion by the RBI.It is the measure taken by RBI,so it is classified as a monetory package.It is incorrect to count the monetory package of the RBI.

When we said USA rolled out a 2 trillion dollar Economic package-it also meant as fiscal package.And Germany also rolled a package of almost 190 million dollars.

But the Indian government combined the monetary and fiscal package together to show that the government has rolled out a package of 20 lakh crores.

RBI Contributed 8 lakh crore package.

The 8 lakh crore package will come from reserves of RBI.It is called liquidity infusion because in Economics 'liquid ' means converting any asset into cash which will make it buying and selling easier.The money lying in the reserves of RBI was not in use in the economy.When RBI will makes it reserves liquid,then it will seep into the economy and the people will able to buy or sell it once it is converted into cash.The RBI will do this by lowering its interest rates so that rest of banks that takes loans from the RBI.And when they take loans at lower interest rates,they would be able to loan out to the companies and people at lower interest as well.And in this way,the extra money of 8 lakh crore rupees with the RBI.

The money would come into the economy in the form of loans.

New package worth 20 lakh crore rupees.

First ,for MSMEs-Micro,small and medium enterprises.Government has decided to dole out collateral free automatic loans worth Rs 3 Lakh crore rupees.Our farmers would be given a concessional creadit of 2 lakh crore rupees.This again giving loans at lower interest rates.

A special credit facility worth 5,000 crore rupees has been provided for Street Vendors.

A supply of free food grains will be provided for the migrant worker for the next 2 months which would cost around 3500 crore rupees.And the government claims that this will benefit 8 crore migrant workers.

One nation,One ration card will also implemented by May 31st 2021.

The government also said that the migrant workers returning would be given employement under MNREGA.

Similarly,EPF contribution has been reduced to 10% from 12%.This too was your money that you were going to access later.You all have the question that how much is government investing?

So,the answer is government is investing in between 1 lakh crore to 2.7 lakh crore rupees.

So,This is all about 20 Lakh crore Economic package.

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