Final Day of 5-Day Test Match of Stimulus Package Announcement by Indian Govt.

What were the focus areas announced by FM in her latest & final Financial Package?

Finance Minister Nirmala Sitharaman announced the 5^th & 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?

1. 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?

1. Ramping up health infrastructure – health & wellness centres – in rural & urban areas.
2. 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?

1. 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 30^th May 2020
2. Manodarpan – psychological counselling to students for mental & emotional well being
3. New Curriculum & Teaching framework will be launched

What were the key highlights for IBC related matters?

1. Default of any debt related to Covid – will not be considered as default
2. No insolvency proceedings will be initiated upto 1 year
3. Minimum amount to raise insolvency proceedings raised from Rs.1 Lac to Rs. 1 crore – this will be a big breathing space for MSMEs
4. Special Insolvency framework will be notified u/s 240A

What were the major announcements for Company Related Matters?

1. 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?

1. Direct listing of securities in overseas stock exchanges
2. Listing of NCDs by Pvt Co’s will not tantamount to being a listed company
3. Lower penalties for all defaults for small companies, one person company, start-ups, etc.

Any major announcements for public sector enterprises policy?

1. All sectors opened for Private Sector and Public sector for specific areas only
2. Public sector will continue in strategic areas only (details will be announced later)
3. 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?

1. Like Centre, State also facing sharp decline in their revenue
2. Centre and RBI has already supported various State Govts through one means or another
3. 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.
4. 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

Invest Surplus Funds

Prepare Financial Plan

Build Business Plan

Raise Funds for business

Buy Business

Sell Business