Dubai: Nirmala Sitharaman, Indian finance minister, unveiled the fifth and last tranche of the Rs 20 lakh crore ($265 billion) COVID-19 economic package as part of the “Atmanirbhar Bharat Abhiyan (Self-reliant India campaign)” on Sunday.
Addressing her fifth press conference, 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."
She detailed seven steps on her media address on Sunday ranging from Mahatma Gandhi Employment Guarantee Act (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.
The government will allocate an additional Rs400 billion over and above the budget estimate, the finance minister said. The budget estimate for MNREGA scheme was Rs 610 billion. Sitharaman said that it will generate 3 billion more person-days of work and it will be addressing the need for work for the returning migrants.
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.
Tech & education
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.
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.
The minister said that debts that are related to the COVID-19 shall be excluded from defaults under Insolvency and Bankruptcy Code (IBC) and further added that no fresh insolvency proceeding will be initiated up to 1 year. 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 Rs10 million from the earlier Rs100,000, this will broadly insulate MSMEs, the minister said.
The minister announced public sector enterprise policy on Sunday. 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.
State government finance
Sitharaman acknowldedged that like the Centre, the states are also witnessing a sharp drop in revenues. The minister said over Rs460 billion crore were devolved as tax revenue to states. Over Rs120 billion ere also dispensed on time. The Health Ministry has also released over Rs 140 billion. “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,” she said
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.