Economic Package Tranche 5 | Rs 40,000 cr more allocated to MGNREGS, states' borrowing limits raised, non-strategic PSUs to be privatised
New Delhi | Jagran Business Desk: Finance Minister Nirmala Sitharaman on Sunday announced the fifth and financial tranche of the Rs 20 lakh crore economic stimulus package that was declared by Prime Minister Narendra Modi to revive the economy of the country that has taken a hit because of the coronavirus pandemic.
While making the announcements, Sitharaman said that eight measures – 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 -- will be declared on Sunday.
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 larger number of durable and livelihood assets including water conservation assets.
Health and Education:
Sitharaman also announced that the government increase the health expenditure investment at 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 to be launched immediately.
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 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 allowed companies to directly list securities in permissible foreign jurisdictions. Private companies, which list non-convertible debentures on stock exchanges, would not to be regarded as listed companies, she said.
Decriminalisation of Company’s Act:
The Finance Minister said that decriminalisation 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 minise wasteful administrative costs, 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 GSDP. 75 per cent thereof was authorised to states in March 2020 itself and timing is left to the states.
Finance Minister Nirmala Sitharaman on Sunday said reforms will be the focus of the fifth and final tranche of 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 first instalment of Rs 1,405 crore and a second one of Rs 1,402 crore.
She allso 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 poor.
Last week, the government pledged a Rs 20 lakh crore (nearly 10 pr 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 retiral benefits.
On Saturday, the government announced a hike in foreign investment limit in defence manufacturing and opened up space facilities while giving a new push to reforms of commercial coal mining, mineral block auction and privatisation of power distribution as it sought new investments to help shore up an economy hit by the coronavirus pandemic.
Beginning March 25, India 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 activities to a standstill as factories and businesses were shut while rendering thousands temporarily unemployed, has since been extended twice through May 17, with some relaxations to allow resumption of economic activities.
According to estimates, the lockdown may have led to 12.2 crore people losing jobs in April and consumer demand evaporating.
(With inputs from PTI)
Posted By: Aalok Sensharma