What were the focus areas announced by FM in her latest & final Financial Package?
Finance Minister Nirmala Sitharaman announced the 5th & final tranche of building the “Atmanirbhar Bharat” – which focuses on seven areas – MNREGA, Health, Education, Businesses, Public Sector Enterprises and support to State Govts.
What were the major announcements for MNREGA?
- Additional Rs.40,000 crore allocated under MNREGA – will generate employment of 300 crore person days so that the workers have jobs in hand in their towns / villages
Key announcements Health Sector?
- Ramping up health infrastructure – health & wellness centres – in rural & urban areas.
- To prepare for future pandemics (if any)
- All districts will have infectious diseases hospital blocks
- Strengthening of lab network
- Encouraging research
- National Digital Health Mission
Major announcements Education Sector?
- PM e-Vidya Digital education with focus on:
- Diksha – One Nation, One Education Platform for Schools
- One earmarked TV Channel – per class – will be dedicated
- Community Radio and Podcasts
- Specially e content for visually and hearing impaired
- Top 100 Universities to start online courses by 30th May 2020
- Manodarpan – psychological counselling to students for mental & emotional well being
- New Curriculum & Teaching framework will be launched
What were the key highlights for IBC related matters?
- Default of any debt related to Covid – will not be considered as default
- No insolvency proceedings will be initiated upto 1 year
- Minimum amount to raise insolvency proceedings raised from Rs.1 Lac to Rs. 1 crore – this will be a big breathing space for MSMEs
- Special Insolvency framework will be notified u/s 240A
What were the major announcements for Company Related Matters?
- Additional relaxation on various compliance timelines (apart from announced earlier)
- Decriminalize minor technical & procedural default
- Compoundable offences to be shifted to resolve it through simpler internal resolution process. This will de-clog NCLT and criminal court
- 7 compoundable offence dropped
- 5 to be dealt under alternative framework
Thus, harassment is expected to be low and ease of business should improve.
Any important relief with regard to ease of doing business?
- Direct listing of securities in overseas stock exchanges
- Listing of NCDs by Pvt Co’s will not tantamount to being a listed company
- Lower penalties for all defaults for small companies, one person company, start-ups, etc.
Any major announcements for public sector enterprises policy?
- All sectors opened for Private Sector and Public sector for specific areas only
- Public sector will continue in strategic areas only (details will be announced later)
- Max 4 PSUs will be there in any notified strategic sectors – implying consolidation to happen in these sectors.
How shall Centre be supporting various State Govts?
- Like Centre, State also facing sharp decline in their revenue
- Centre and RBI has already supported various State Govts through one means or another
- Presently, States can borrow upto 3% of their GDP; 75% thereof was already authorised. However, only 14% of authorised limit has been borrowed by State till now.
- State borrowing ceiling is allowed to be increased from 3% to 5% of their GDP ~ state will get extra Rs. 4.28 Lacs Crore. This shall be performance driven (explained below)
- First incremental 0.5% – unconditional
- Next incremental 1.0% in 4 tranches of 0.25% – each tranche linked to specified, measurable, feasible reform actions
- Last 0.5% – if milestones achieved in at least three out of 4 reform areas.
Thus, states taking actual action on the ground will be rewarded by this Scheme of the Centre.
Breakup of Rs.20 Lacs Cr Package
Rs. Cr | Rs. Cr | |
RBI Measures (Actual) | 801,603 | |
Before PM Announcements: | ||
Rev Loss due to tax concession-Mar | 7,800 | |
PM Garib Kalyan Yojana | 170,000 | |
Health Sector concession | 15,000 | |
192,800 | ||
Stimulus Package by FM: | ||
Day 1 | ||
W Cap Facilities for Businesses | 300,000 | |
Subordinate Debt for Stressed Assets | 20,000 | |
FOF for MSMEs | 50,000 | |
EPF Support | 2,800 | |
Reduction in EPF Rates | 6,750 | |
Special Liq Scheme for HFC | 30,000 | |
Partial Credit for NBFC | 45,000 | |
For Discoms | 90,000 | |
Reduction in TDS/TCS Rates | 50,000 | |
Sub Total |
594,550 |
|
Day 2 | ||
Free Food Grain for 2 months | 3,500 | |
Mudra Shishu Loan | 1,500 | |
Street Vendor | 5,000 | |
Housing Class MIG | 70,000 | |
WC through NABARD | 30,000 | |
Addl. Credit KCC | 200,000 | |
Sub Total |
310,000 |
|
Day 3 | ||
Food Micro Enterprises | 10,000 | |
PM Matsya Sampada Yojana | 20,000 | |
TOP to TOTAL | 500 | |
Agri Infra Fund | 100,000 | |
Animal Husbandry Infra Dev Fund | 15,000 | |
Herbal Cultivation | 4,000 | |
Bee keeping Initiative | 500 | |
Sub Total |
150,000 |
|
Day 4 & 5 | ||
Viability Gap Funding | 8,100 | |
MNREGA | 40,000 | |
Sub Total |
48,100 |
|
GRAND TOTAL |
2,097,053 |