Updated: May 17, 2020 6:13:53 pm
Nirmala Sitharaman, the union finance minister, unveiled the fifth and last tranche of the Rs 20 lakh crore COVID-19 economic package as part of the “Atmanirbhar Bharat Abhiyan (Self-reliant India campaign)” on Sunday.
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Addressing her fifth press conference in as many days, the minister began her speech by quoting Prime Minister Narendra Modi while addressing the reporters, She said, “In order to prove the resolve of the self-reliant India, land, labour, liquidity and laws, all have been emphasised in this package,” and added that, “We have announced several reforms in this regard and shall continue with the same today.”
Sitharaman said that in the last four days of announcements, the govt has had several reforms addressing the land, labour, liquidity and laws and added that today’s announcements will be a continuation to that.
She also commended the Food Corporation of India (FCI) and Nafednd and states for giving pulses and grains in huge quantities to the poor during the ongoing nationwide lockdown despite various challenges in logistics.
She detailed seven steps on her media address on Sunday ranging from MNREGA, health and education related sector, businesses and COVID-19, decriminalisation of Companies Act, Ease of Doing Business, Public Sector Enterprises- related steps, state governments and related resources.
Here are the key decisions in detail
Sitharaman on MNREGA
— The government will allocate an additional Rs 40,000 crore over and above the budget estimate, the finance minister said. The budget estimate for MNREGA scheme was Rs 61,000 crore. Sitharaman said that it will generate 300 crore more person-days of work and it will be addressing the need for work for the returning migrants.
Sitharaman on health and education sector
— The minister said that public expenditure on health will be increased. She said that the investments at grassroots for health and wellness centres both at rural and urban levels will be getting ramped up. All the districts will have infectious disease hospital blocks. This apart, public health labs will be set up at block levels, Sitharaman said.
— Sitharaman spoke about the technology-driven education through DIKSHA. She said that PM e-VIDYA programme for multi-mode access to digital and online education will be immediately launched. She added that there will be one earmarked TV channel for class 1-12, and there will be extensive use of radio, community radio and podcasts, special e-content for the visually and hearing-impaired students.
— She also said that top 100 universities have been permitted to start online courses by May 30. This apart, Sitharaman also said that an initiative to extend psycho-social support to students, teachers and families for mental health and emotional well-being called Manodarpan will be launched immediately.
Sitharaman on IBC
— The minister said that debts that are related to the COVID-19 shall be excluded from defaults under IBC and further added that no fresh insolvency proceeding will be initiated up to 1 year. Sitharaman said that at present the MCA has extended this by 6 months and the government intends to extend this by another 6 months.
— The finance minister said that for MSMEs, a special insolvency framework is going to be notified under section 240-A of the IBC. The minimum threshold to initiate the insolvency proceedings is raised to Rs 1 crore from the earlier Rs 1 lakh, this will broadly insulate MSMEs, the minister said.
Sitharaman on Companies Act
— Under the Companies Act, the minister said that majority of compoundable offences sections will be shifted to internal adjudicating mechanisms. The amendments, she said, will de-clog the criminal courts of the country and the National Company Law Tribunal (NCLT).
Sitharaman on ease of business
— Nirmala Sitharaman also said that direct listing of securities by the public companies can be done in permitted foreign jurisdictions. Separately she said that private companies which list non-convertible debentures (NCDs) on the stock exchanges will not to be considered as listed companies.
Sitharaman on public sector enterprise policy
— The minister announced public sector enterprise policy. She said that India needs a policy wherein the private sector will be allowed to participate in all the sectors while the public sector enterprises will still continue to play a key role. She said that the government will announce a new policy which will broadly categorise the strategic sectors and other sectors. A list of strategic sectors that require the presence of public sector enterprises in the interest of the public will also be notified. Sitharaman said that in the strategic sectors, at least one public sector enterprise will be there however the private sector will also be allowed in it.
— In other sectors, the public sector enterprises will get privatised. The number of enterprises in the strategic sectors will generally be only one to four and others will be privatised/merged/brought under holding companies so as to minimise the administrative costs.
Sitharaman on state governments
— Speaking on the support which has been extended to state governments, the finance minister said, “Like the Centre, the state is also witnessing a sharp drop in revenues. Over Rs 46,038 crore were devolved as tax revenue to states. Over Rs 12,000 crore were also dispensed on time. The Health Ministry has also released over Rs 14,000 crore. The RBI in a very timely step has increased ways of advancing limits for states by 60 per cent. The number of days a state can be in an overdraft situation in a quarter have been raised.”
— Sitharaman said “While the borrowing ceiling of the states were increased, they have only borrowed 14 per cent of the limit authorised to them; 86 per cent remain unutilised as of now. We have now allowed them to borrow up to 5 per cent of GSDP from the earlier 3 per cent. This means, the states can now borrow an additional amount of Rs 4.28 lakh crore.”
— The minister announced that “Part of the borrowing (by states) will be linked to specific reforms. From 0-3 per cent, it will be unconditional. Upto 4.5 per cent, it will be released in four tranches. The last 0.5 per cent will be given as soon as the milestones are reached in at least three of the conditions.”
The finance minister’s announcements on Wednesday (day 1) included six measures for the MSME sector, two for EPF, two for NBFC and MFI sector, one for discoms, one for contractors, one for real estate sector, and three tax measures. On Thursday, Sitharaman said that migrant workers who do not have either central or state PDS cards would be given free food grain supply for the next two months among others.
On Friday, she announced a total of 11 measures, of which eight were aimed towards building better capacities and allocation for ramping up storage and logistics. The remaining three were governance and administrative related reforms. The minister on Saturday eased the limits on foreign direct investment (FDI) in defence manufacturing, announced the privatisation of six more airports, opened up more airspace and allowed private sector in coal mining sector.
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