( Nirmala Sitharamn)
Speed Post News Network
New Delhi : Union Finance & Corporate Affairs Minister Nirmala Sitharaman on June 28, 2021, here announced a slew of measures to provide relief to diverse sectors affected by the 2nd wave of COVID-19 pandemic. The measures announced also aim to prepare the health systems for emergency response and provide impetus for growth and employment.
Union Minister of State for Finance & Corporate Affairs Anurag Singh Thakur; Finance Secretary Dr T V Somanathan; Secretary, DFS, Debashish Panda, and Secretary, Revenue, Tarun Baja, were also present during the announcement of relief package, according to a PIB release.
A total of 17 measures amounting to Rs. 6,28,993 crore were announced. They included two measures announced earlier, i.e. the additional Subsidy for DAP & P&K fertilisers, and extension of Pradhan Mantri Garib Kalyan Anna Yojana (PMGKAY) from May to November, 2021.
The measures announced on June 28 can be clubbed into 3 broad categories:-
- Economic Relief from Pandemic
- Strengthening Public Health
- Impetus for Growth & Employment
- Economic relief from Pandemic
Eight out of 17 schemes announced here aim at providing economic relief to people and businesses affected by the COVID-19 pandemic. Special focus is on health and reviving travel, tourism sectors.
- 1.10 lakh crore Loan Guarantee Scheme for COVID Affected sectors : Under this new scheme, additional credit of Rs 1.1 lakh crore will flow to the businesses. This includes Rs 50,000 crore for health sector and Rs 60,000 crore for other sectors, including tourism.
The health sector component is aimed at upscaling medical infrastructure targeting underserved areas. Guarantee cover will be available both for expansion and new projects related to health/medical infrastructure in cities other than 8 metropolitan cities. The guarantee cover will be 50% for expansion & 75% for new projects. In case of aspirational districts, the guarantee cover of 75% will be available for both new projects and expansion. Maximum loan admissible under the scheme is Rs 100 crore and guarantee duration is up to 3 years. Banks can charge a maximum interest of 7.95% on these loans. Loans for other sectors will be available with an interest cap of 8.25% p.a. Thus the loans available under the scheme will be much cheaper compared to the normal interest rates without guarantee of 10-11%.
- Emergency Credit Line Guarantee Scheme (ECLGS) : The government has decided to expand the Emergency Credit Line Guarantee Scheme (ECLGS), launched as part of Aatma Nirbhar Bharat Package in May, 2020, by Rs 1.5 lakh crore. ECLGS has got a very warm response with Rs 2.73 lakh crore being sanctioned and Rs 2.10 lakh crore already disbursed under the scheme. Under the expanded scheme, limit of admissible guarantee and loan amount is proposed to be increased above existing level of 20% of outstanding on each loan. The overall cap of admissible guarantee is thus raised from Rs 3 lakh crore to Rs 4.5 lakh crore.
- Credit Guarantee Scheme for Micro Finance Institutions : This is a completely new scheme announced today which aims to benefit the smallest of the borrowers who are served by the network of Micro Finance Institutions. Guarantee will be provided to Scheduled Commercial Banks for loans to new or existing NBFC-MFIs or MFIs for on lending up to Rs 1.25 lakh to approximately 25 lakh small borrowers. Loans from banks to be capped at MCLR plus 2%. Maximum loan tenure will be 3 years, and 80% of assistance to be used by MFI for incremental lending. Interest rates will be at least 2% below maximum rate prescribed by RBI. The scheme focuses on new lending, and not on repayment of old loans.
- Scheme for Tourists guides/ stakeholders : Another new scheme announced on June 28 aims at providing relief to people working in tourism sector. Under new Loan Guarantee Scheme for COVID-affected sectors, working capital/personal loans will be provided to people in tourism sector to discharge liabilities and restart businesses impacted due to COVID-19 pandemic. The scheme will cover 10,700 Regional Level Tourist Guides recognised by Ministry of Tourism and Tourist Guides recognised by the State Governments; and about 1,000 Travel and Tourism Stakeholders (TTS) recognised by Ministry of Tourism. TTS’s will be eligible to get a loan upto Rs. 10 lakh each while tourist guides can avail loan upto Rs 1 lakh each.
- Free one month tourist visa to 5 lakh tourists : This is another scheme aimed at boosting the tourism sector. It envisages that once Visa issuance is restarted, the first 5 lakh Tourists Visas will be issued visa free of charge to visit India. However, the benefit will be available only once per tourist. The facility will be applicable till March 31, 2022 or till 5 lakh visas are issued, whichever is earlier.
- Extension of Aatma Nirbhar Bharat Rozgar Yojana (ANBRY) : Aatma Nirbhar Bharat Rozgar Yojana was launched on October 1, 2020. It incentivises employers for creation of new employment, restoration of loss of employment through EPFO. Under the scheme, subsidy is provided for two years from registration for new employees drawing monthly wages less than Rs 15,000 for both Employer’s and Employee’s share of contribution (total 24% of wages) for establishment strength up to 1,000 employees; and only employee’s share (12% of wages) in case of establishment strength of more than 1,000.
- Additional Subsidy for DAP & P&K fertilizers: Additional subsidy to farmers for DAP and P&K fertilizers was announced recently. Details of the same were furnished. Existing NBS subsidy was Rs. 27,500 crore in FY 2020-21 which has been increased to Rs. 42,275 crore in FY 2021-22. Thus, the farmers will benefit by an additional amount of Rs. 14,775 crore.
- Free food grains under Pradhan Mantri Garib Kalyan Yojana (PMGKY) from May to November, 2021: In the last Financial Year, the government has spent Rs. 133,972 crore under PMGKY to ameliorate the hardships faced by the poor due to economic disruption caused by COVID-19 Pandemic. The scheme was launched initially for the period from April to June 2020. However, keeping in view the need for continuous support to the poor and the needy, the scheme was extended till November 2020. In the wake of the second wave of COVID-19 pandemic, the scheme was relaunched in May 2021 to ensure food security of poor/vulnerable. Five kg of food grains will be provided free of cost to NFSA beneficiaries from May to November 2021.
- Strengthening Public Health : Rs. 23,220 crore more for public health with emphasis on children and paediatric care/paediatric beds:
Besides supporting the health sector through credit guarantee scheme, a new scheme for strengthening public health infrastructure and human resources with outlay of Rs. 23,220 crore was also announced. The new scheme will focus on short term emergency preparedness with special emphasis on children and paediatric care/paediatric beds. An outlay of Rs. 23,220 crore is earmarked for the scheme to be spent in the current financial year itself.