In continuation with its plans of providing financial relief to the various sectors in the economy that have been impacted due to the coronavirus pandemic, Finance Minister Nirmala Sitharaman on June 28 announced a slew of measures covering sectors like health, tourism, agriculture, among others.
In order to support the Indian economy in the fight against the COVID-19 pandemic Union Minister for Finance & Corporate Affairs Nirmala Sitharaman announced a stimulus package of Rs 6,28,993 crore.
Of the total amount, the FM has allocated Rs 50,000 crore for the Health Sector aimed at upscaling medical infrastructure targeting the underserved areas. The amount aims at providing guarantee cover for expansion and new projects related to health/medical infrastructure in cities other than 8 metropolitan cities.
The maximum loan amount will be Rs 100 crore, and the Guarantee duration will be “Up to 3 years” with the interest rate capped at 7.95 per cent. The Guarantee would be provided by a National Credit Guarantee Trustee Company. For the other Sectors, an allocation of Rs 60,000 crore has been made with an interest rate capped at 8.25 per cent per annum
The FM also announced an extension of Pradhan Mantri Gareeb Kalyan Anna Yojana (PMGKAY) under which 5 kg of food grains will be provided free of cost to NFSA beneficiaries from May to November 2021. The Estimated financial implications are said to be Rs 93,869 crore thereby bringing the total cost of PMGKY to Rs 2,27,841 crore.
Additional Rs 1.5 lakh Cr for Emergency Credit Line Guarantee Scheme (ECLGS)
Launched as part of Atma Nirbhar Bharat Package in May, 2020, the ECLGS-1.0, 2.0 and 3.0 have resulted in credit disbursal of Rs 2.69 lakh crore to 1.1 crore units by 12 Public Sector Banks, 25 Private Sector Banks, and 31 Nonbanking Financial Companies, the FM said. She added that the ‘Contact intensive’ sectors were already covered and shall be continued. The FM said that Rs 4,000 crore have been given to these sectors through this window so far. “Sector wise details will be finalized as per evolving needs…Overall cap of admissible guarantee to be raised from Rs 3 lakh crore to Rs 4.5 lakh crore,” FM said.
Finance Minister also announced an extension of AatmaNirbhar Bharat Rozgar Yojana till 31st March 2022. Since October 2020, about 21.42 lakh beneficiaries of 79,577 establishments have been benefitted from the scheme.
Nish Bhatt, Founder & CEO, Millwood Kane International – an Investment consulting firm said the enhanced limit for the credit guarantee scheme will ensure funding for businesses and help the most affected sectors. “The economy needs the government’s support especially post the lockdown in months of April and May. MSMEs, MFIs, and small and unorganized sectors are the biggest employment creators. The measures will help boost growth, given the increased pace of vaccination across the country. The announcement for the health infra sectors will help strengthen the fight against the pandemic,” he said.
Rs. 23,220 Cr More for Public Health
In order to Ensure adequate availability of equipment, medicines; access to teleconsultation; ambulance services and also for enhancing testing capacity and supportive diagnostics, and to further strengthen the capacity for surveillance and genome sequencing, the FM also announced an additional allocation of Rs 23,220 crore towards public health. “The New scheme is focused on short term emergency preparedness with special emphasis on children and paediatric care/paediatric beds.Rs 23,220 Cr earmarked for one year. It will help increase the availability of ICU beds, oxygen supply at central, district and subdistrict level,” the minister said.
The FM also announced financial support to more than 11,000 registered tourist guides/travel and tourism stakeholders. The FM said that a working capital/personal loans will be provided with a 100 per cent guarantee to people in tourism sector. There won’t be any processing charges, and it will also come with a waiver on the prepayment charges.
5 Lakh Visas Free: The FM made it clear that as soon as visa issuance is restarted, the first 5 lakh tourist visas will be issued free of charge. Also, the benefit will be available only once per tourist.”The scheme will be applicable till 31st March 2022, or till 5 lakh visas are issued, whichever is earlier,” the FM said.
The scheme will cover 10,700 Regional Level Tourist Guides recognised by Ministry of Tourism and Tourist Guides recognised by the State Governments. It will also cover the Travel and Tourism Stakeholders (TTS) recognized by Ministry of Tourism. There are a total of 904 TTS, the minister said in her presentation. The total financial implication is estimated at Rs 100 crore, the minister said.
Under the scheme Loans will be provided with 100 per cent guarantee up to the following limits:• Rs. 10,00,000 for TTS ( per agency)• Rs. 1,00,000 for tourist guides licensed at the Regional or State level• No processing charges, waiver of foreclosure/prepayment charges.. No additional collateral requirementThe said scheme will be administered by the Ministry of Tourism through NCGTC, the government said.
Commenting on the move, Shivpriya Nanda, Partner, J Sagar Associates said: “There is always more that can be done for the tourism industry but this definitely will provide the much-needed support to the tourist guides and travel agencies who have been amongst the worst sufferers. In the near term, domestic tourism could become an important contributor to the economy and travel agents and tourist guides are its backbone. They need to be helped back on their feet for the rehabilitation of this sector”.
Revival of NERAMAC
The FM also announced a financial package for the revival of the North Eastern Regional Agriculture Marketing Corporation (NERAMAC). The said package announced was for Rs 77.45 crore proposed for financial restructuring and infusion of funds to NERAMAC.
Credit Guarantee Scheme
A new Credit Guarantee scheme to facilitate loans to 25 lakh persons through Micro Finance Institutions was also announced by the FM. The interest rate on loans from banks to be capped at MCLR plus 2 per cent. Focus on new lending not repayment of old loans. The FM also proposed to provide additional corpus to National Export Insurance Account over five years to allow it to underwrite additional Rs 33,000 crore of project exports.
Extension of Atmanirbhar Bharat Rozgar Yojana
The FM also announced an extension to the Atmanirbhar Bharat Rozgar Yojana that was launched on 1st Oct, 2020. It Incentivizes employers for creation of new employment, restoration of loss of employment through EPFO. It was an approved outlay Rs. 22,810 crore for 58.50 lakh estimated beneficiaries. The Last date for registration is 30.06.2021 but now this has been extended to 31.03.2022, the FM said. Under the scheme, a Subsidy is provided for two years from registration for new employees drawing monthly wages less than Rs. 15000 for both Employer’s and Employee’s share of contribution (total 24% of wages) for establishment strength upto 1000 employees. And in case of only Employee’s share (12% of wages) in case the establishment strength exceeds 1000. Till June 18, 2021, a total benefit of Rs. 902 crore have been given to 21.42 lakh beneficiaries of 79,577 establishments.
Additional Subsidy for DAP & P&K fertilizers
An additional amount of Rs.14,775 crore will be provided to the farmers as subsidy for DAP and P&K fertilizers. This would include Rs 9,125 crore additional subsidy for DAP and Rs.5,650 crore additional subsidy for NPK based complex fertilizer
Originally published on 28th June 2021