FM Sitharaman focuses on 8 important measures for the final tranche of Rs. 20 lakh crore economic package
NEW DELHI: Union Finance Minister Nirmala Sitharaman addressed the media to announce the fifth and the final tranche of the stimulus package worth Rs 20 lakh crore declared by Prime Minister Narendra Modi on Tuesday. In the last 4 days, the finance minister has announced a series of initiatives taken by the government to ease the path ahead as country reels from the coronavirus pandemic.
Majorly FM has focused on important 8 measures for the final tranche of the package. Those 8 measures are MGNREGA, Health and Education, Businesses and COVID, Decriminalisation of Company’s Act, Ease of doing business, Public Sector Enterprises and related matters and State governments and resources related to state governments.
MGNREGA:
The Finance Minister said that an additional Rs 40,000 crore will be allocated to MGNREGS to help provide jobs to migrant workers returning home. Sitharaman said that it will help generate nearly 300 crore person-days in total and create a larger number of durable and livelihood assets including water conservation assets.
Health and Education:
Sitharaman also announced that the government will increase the health expenditure and investment at the grassroots level will be ramped up for health and wellness centres, with particular focus on aspirational districts. The Finance Minister said that all districts will have infectious diseases block in hospitals and public health labs will be set up at block levels.
Sitharaman also said that a programme for multi-mode access to digital or online education wil be launched soon. Also, one earmarked TV channel per class from 1 to 12 (one class, one channel) will be part of this, she said while adding that top-100 universities will be permitted to automatically start online courses by May 30, 2020.
Businesses and COVID and Ease of Doing Business:
Sitharaman said that the central government has decided that all coronavirus-related debt will be excluded from the definition of default. She said that no fresh insolvency will be initiated for one year under the Insolvency and Bankruptcy Code and minimum threshold to initiative insolvency proceeding has been raised to Rs 1 crore from Rs 1 lakh to benefit MSMEs.
Also, the government will allow companies to directly list securities in permissible foreign jurisdictions. Private companies, which list non-convertible debentures on stock exchanges, would not be regarded as listed companies, she said.
Decriminalization of Company’s Act:
The Finance Minister said that decriminalization of the Companies Act in violations involving minor technical and procedural defaults including shortcoming in CSR reporting, inadequacies in board report, filing defaults and delay in holding AGM.
Majority of the compoundable offences sections will be shifted to internal adjudication mechanism (IAM), she said adding that amendments will be brought through an Ordinance and will de-clog the criminal courts and NCLT.
Public Sector Enterprises and related matters:
To make India ‘self-reliant’, Sitharaman said that under the new ‘coherent’ public sector enterprises policy, private companies will be allowed to play a part. “To minimise wasteful administrative costs, the number of enterprises in strategic sectors will ordinarily be only one to four; others will be privatised/merged/brought under holding companies,” Sitharaman said.
State governments and resources related to state governments:
The central government has decided to increase the borrowing limit of states from existing 3 per cent to 5 per cent of GSDP, said Sitharaman while adding that the states have only borrowed 14 per cent of the limit.
“Centre has decided to increase borrowing limits of states from 3 per cent to 5 per cent of Gross State Domestic Product (GSDP) for 2020-21,” Sitharaman said.States have so far borrowed only 14 per cent of the limit which is authorised to them. 86 per cent of the limit remains unutilised,” she added.
The states net borrowing ceiling for 2020-21 is Rs 6.41 lakh crores, based on 3 per cent of GDP. 75 per cent thereof was authorised to states in March 2020 itself and timing are left to the states.
Finance Minister Nirmala Sitharaman on Sunday said reforms will be the focus of the fifth and final tranche of the economic stimulus package to deal with the economic fallout of the COVID-19 pandemic.
She said the package would focus on MGNREGA, healthcare and education, businesses, de-criminalisation of the Companies Act, ease of doing business, public sector undertakings, and resources related to state government.
During the coronavirus-induced lockdown, Rs 16,394 crore has been paid to 8.19 crore farmers under the Rs 2,000 free cash dole scheme of PM Kisan, she said.Old-age beneficiaries and others have been paid the first instalment of Rs 1,405 crore and the second one of Rs 1,402 crore.
She also said that as much as Rs 10,025 crore has been transferred to 20 crore women Jan Dhan account holders. Also, 6.81 free LPG cylinders have been given to the poor.
Last week, the government pledged a Rs 20 lakh crore (nearly 10 per cent of GDP) package to support the economy headed for its first full-year contraction in more than four decades.
This included March 27 announcement of Rs 1.7 lakh crore package of free foodgrain and cash to poor for three months and the Reserve Bank of India’s Rs 5.6 lakh crore worth of liquidity measures since March.
Further to this, the government last week announced a cumulative package of Rs 10.73 lakh crore, mostly in liquidity measures with negligible extra-budget spending. The measures included a variety of steps for small businesses, street vendors, farmers and poor migrants as well as shadow banks and electricity distributors, but they have largely been either credit guarantee schemes or new fund creations to be shouldered by banks and financial institutions.
The government’s cash outgo is limited to a maximum of Rs 18,500 crore on free foodgrain and affordable housing to migrant workers as well as limited tax relief and marginal dole to some companies on employee retirement benefits.