In his
address to the nation, the Indian Prime Minister announced a stimulus package
of Rs 20 lakh crore aimed at all sections of society and the economy. The Union
Finance Minister (FM) announced the details of the package in five daily press
briefings beginning 13 May 2020 and ending 17 May 2020.
The
highlights of the measures announced are as follows:
1. First press
briefing on 13 May 2020
The first press briefing addressed the
concerns of sectors that included MSMEs, EPF, DISCOMS, Contractors, Real Estate
and Taxation.
MSMEs
MSMEs were singled out for special attention
with six measures that included
Collateral-free automatic loans worth
Rs 3 lakh crore guaranteed by the Central Government with liberal terms
benefitting 45 lakh MSMEs
Rs 20,000 crore liquidity measure
fully guaranteed by Central Government benefitting 2 lakh MSMEs
Rs 10,000 crore corpus for setting up
Fund of Funds to generate Rs 50,000 crore equity for viable MSMEs
Change in definition of MSMEs and
removal of distinction between manufacturing and services
No global tenders for government
contracts up to Rs 200 crore value
Government to pay receivables to MSMEs
for government contracts within 45 days
Employees drawing less than Rs 15,000
per month will get extension of liquidity relief Of Rs 2,500 crore for another
3 months up to August 2020 benefitting 3.6 lakh entities
Employer’s contribution reduced to 10%
from 12% for 3 months providing Rs 6,750 crore of liquidity to 72.2 lakh
entities
NBFCs
NBFCs, Housing Finance Institutions and MFIs
merited two measures:
Rs 30,000 crore liquidity infusion for
buying investment quality debt papers fully guaranteed by the Central Government
Rs 45,000 crore liquidity infusion –
Partial Credit Guarantee Scheme 2.0 – by purchasing commercial paper and bonds
in which Central Government will bear first 20% loss
DISCOMS
Rs 90,000 crore liquidity against
receivables of DISCOMS under State Government guarantee
Contractors
Extension of contracts of Railways,
Highways, Road Transport and CPWD by six months
Release of partial bank guarantees
matching completed work
Real Estate
Treating COVID-19 period as an act of
God
Extending registration date by 6
months for projects expiring on 25 March 2020
Taxation
25%
cut in TDS and TCS rate
for non-salaried payments up to 31 March 2021 adding Rs 50,000 crore liquidity
Charitable institutions will receive
immediate refunds
Extension of Vivad se Vishwas scheme until
31 December 2020
Extension of filing of ITRs until 30
November 2020
2. Second press briefing
on 14 May 2020
The second press briefing addressed the concerns
of sectors that included migrant workers,
small farmers, street vendors
and middle-income group.
Migrant workers
Migrant
workers faced hardships due to income drying up on account of halting of the
economy. The measures announced for them included
Free 5 kg of rice or wheat and 1 kg
of chana per month for the next two months benefitting 8 crore migrant workers
at a cost of Rs 3,500 crore incurred by Central Government
One Nation One Ration Card (ONORC)
through national portability
Migrant worker returnees to get work under
MGNREGS
Creation of Affordable Rental Housing
Complexes (ARHC) in which migrant workers can rent accommodation under PM Awas
Yojana
Interest
subvention of 2% for next 12 months under the MUDRA Shishu Loan scheme for
those who have availed loans up to Rs 50,000 benefitting 3 crore people
Street Vendors
Rs
10,000 working capital loan facility to help them start work after lockdown
benefitting 50 lakh street vendors
Middle Income
Group – Affordable Housing
Middle-income
group households will get extension of Credit-linked subsidy scheme (CLSS) up
to March 2021 benefitting 5.8 lakh MIG households spurring investments of Rs
70,000 crore
Tribal Welfare
Rs
6,000 crore will be spent on creating jobs for tribal and adivasis under CAMPA
(Compensatory Afforestation and Management Planning Authority)
Small and
marginal farmers
Rs
30,000 crore for emergency working capital funding to farmers beyond the
existing Rs 90,000 crore normal refinance route benefitting 3 crore farmers
Kisan Credit Card
2.5 crore more farmers including fishermen and
animal husbandry farmers to get Kisan Credit Card scheme through which Rs 2
lakh credit flow will be generated
3. Third press briefing
on 15 May 2020
The third press briefing addressed the
concerns of disruptions in supply chain infrastructure in sectors such as agriculture,
food processing, fisheries, animal
husbandry, horticulture, herbal cultivation and beekeeping.
Agriculture Infrastructure Fund
Rs 1 lakh crore Agriculture
Infrastructure Fund to fund infrastructure projects at aggregation points and
farm-gate
Operation Green to encompass all
fruits and vegetable products
Thrust to bee-keeping activities
Opening of borders for inter-state
trade
Micro Food Enterprises
Rs 10,000 crore allotted for
formalizing Micro Food Enterprises in line with “Vocal for Local with
Global Outreach” intent benefitting 2 lakh enterprises
PM Matsya Sampada Yojana (Fisheries)
Rs 20,000 crore earmarked for marine,
aquaculture and inland fisheries activities including cold chains and fishing
harbours generating 55 lakh employment opportunities
Herbal Cultivation
Rs 4,000 crore for herbal cultivation
spread over 1 million hectare of land
Animal Husbandry
Rs 15,000 crore Animal Husbandry
Infrastructure Development Fund to incentivize private sector participation in
dairies
Rs 13,343 crore outlay for National
Animal Disease Control Programme to vaccinate 53 crore animals in the country
4. Fourth press briefing
on 16 May 2020
The fourth press briefing announced policy
initiatives aimed at eight sectors—coal, minerals, defence production, civil
aviation, power distribution, social infrastructure, space and atomic energy.
Coal
Removing government monopoly, commercial mining will
be opened on the basis of revenue-sharing mechanism
Rs 50,000 crore set aside for evacuation
infrastructure
Mining sector
Structural reforms in mining of
minerals through seamless composite exploration-cum-mining-cum-production
regime
500 mining blocks to be auctioned
Joint auction of bauxite and coal
mineral blocks to help reduce cost of electricity generation
Removal of distinction between
captive and non-captive mines to help improve efficiency in mining and
production
Defence production
FDI limit in defence manufacturing increased
to 74% from 49% under automatic route
Project Management Unit (PMU) to be
set up to help contract management and determine requirements of
weapons/platforms and overhaul trial and testing procedures
List of weapons/platforms banned for
imports to be drawn up and list will be enlarged in the future
Reducing the defence import bill is a
major objective
Civil aviation
Optimal utilization of Indian air
space is planned to help reduce operational costs of airlines
Rs 13,000 crore earmarked for
improving facilities to world standards in 12 airports
Rs 2,300 crore earmarked for building
six more airports under PPP model
Power distribution sector
Privatizing power distribution
companies in the union territories (UT)
Reforms in tariff policy covering
consumer rights, promotion of industry and sustainability of the sector
Social-infrastructure
Rs 8,100 crore provision is made
through viability gap funding (VGF) to meet immediate needs of social
infrastructure projects
VGF is increased to 30% from the
present 20%
Space sector
Increased participation of private
sector in space projects including satellites, launches and space-based
services with the active participation of ISRO
Creating geo-spatial data policy for
providing remote-sensing data to tech-entrepreneurs
Atomic energy
Establishment of a research reactor
under PPP model to produce medical isotopes to discover affordable treatment
diseases including cancer
Establishment of facilities under PPP
model to help food preservation through irradiation technology
Linking startup ecosystem with nuclear
sector to synergize research facilities with tech-entrepreneurs
5. Fifth press briefing
on 17 May 2020
The fifth press briefing announced steps
covering various aspects such as MNREGA,
health and education, COVID-19, Companies Act, Ease of Doing Business and Public Sector Enterprises.
MNREGA
Rs 40,000 crore added to the budgeted Rs 61,000 crore
MNREGA scheme to generate 300 crore more person-days to help returning migrants
Health
Public expenditure on health will be increased
Health and wellness centres in rural and urban areas
at grass root level will be expanded
Infectious disease block in hospitals to be set up in
each district
Public health labs to be set up in each block
Education
Technology-driven education through DIKSHA – use of
TV, radio, community radio and podcasts
One dedicated TV channel for each class from first to
twelfth
PM e-VIDYA programme to be launched for multi-mode
access to digital and online education
Special e-content for the visually and
hearing-impaired students
Top 100 universities to start online courses by May 30
Manodarpan, a program to provide psycho-social support
to students, teachers and families for mental health and emotional well-being to
be launched immediately
Defaults under COVID-19
Debts related to COVID-19 to be excluded from defaults
under IBC
No fresh insolvency proceedings for one year
Special insolvency framework for MSMEs to be notified
under section 240-A of the IBC
Minimum threshold to initiate insolvency proceedings
is raised to Rs 1 crore from the existing Rs 1 lakh, which will exclude a
majority of MSMEs from action under IBC
Companies Act
Majority of compoundable offences sections under
Companies Act being shifted to internal adjudicating mechanisms relieving
courts and NCLT
Ease of doing business
Public companies can list securities directly in
foreign jurisdictions
Private companies listing non-convertible debentures
(NCDs) on the stock exchanges will not be considered as listed companies
Public Sector Enterprise
PSE policy to be tweaked to allow private sector to
enter all sectors
Strategic sectors will have at least one PSE and
private sector can also participate
PSEs in non-strategic sectors will be privatized while
retaining one to four PSEs n the sector
PSE structure will be rationalized under holding
companies
State Governments
Rs 4.28 lakh crore additional borrowing by states as
they are allowed to borrow up to 5 per cent of GSDP from the earlier 3 per cent
subject to states undertaking reforms
The measures announced by the FM including the measures taken by the government prior to 12 May 2020 amount to Rs 21 lakh crore, perhaps the most comprehensive measures taken by any government in the history of independent India.
20 May 2020
8 mins read
Previous Post
