Union Finance Minister Nirmala Sitharaman is announcing relief measures to boost health infrastructure and exports among others.
Here are the highlights:
PPP and asset monetisation
Nirmala Sitharaman's last announcement: A new streamlined process for PPP and asset monetisation. The current process was long and involved long delays in approving PPPs.
The aim is to have a speedy clearance for projects so that the private sector's efficiency can come in and asset monetisation can be quickly done.
The total amount of this package announced today adds up to Rs 6,28,993 crore.
PLI scheme for electronics manufacturing extended
The PLI scheme for large scale electronics manufacturing provides incentives of 6% tapering down to 4% on incremental sales of goods. The incentives were to be applicable from August 1, 2020. Now, we have extended the tenure of the scheme by one year till 2025-26, and for those who made investments in 2020-21 will get counted in this because we have given them the option to choose any five years to meet the production target.
The companies which were not able to achieve targets had very many legitimate reasons so they have been given more time.
We are executing the Budget announcement of results-linked incentive scheme for power distribution. It is a major reform that will have a State-specific approach, not a one size fits all approach. The scheme has been allocated Rs 3.03 lakh crore, with the Centre's share at Rs 97, 631 crore.
This is a major step and the amount being announced is also big.
Broadband for villages
For Digital India, the PM had mentioned that broadband connectivity will be available for all gram panchayats in 1000 days from the Independence Day of 2020.
1,56,223 gram panchayats are now service-ready. The rest have to be extended the same facility so an additional Rs 19,041 crore is being provided so as to meet the 1,000 days target. This is a totally new amount I am announcing, taking the BharatNet project total cost to Rs 61,109 crore. We should be able to complete the work with this amount.
National Export Insurance Account
We have decided to extend support to the National Export Insurance Account (NEIA), which shall now underwrite an additional Rs 33,000 crore for project exports over the next five years through the Exim Bank of India. India's project exports have been doing well and will get a boost from this.
For merchandise exports, the Export Credit Guarantee Corporation provides support to 30% of India's merchandise exports. Over the next five years, they will be given equity so as to leverage the equity and provide coverage to Rs 88,000 crore of merchandise exports.
NERAMAC
A very critical institution for north-eastern agriculture development, NERAMAC, established in 1982, has been suffering from lack of funds. It has registered 13 GI crops and this institution is getting a Rs 77.45 crore infusion as a revival package so that financial restructuring can be done and they can prepare such business plans to give 10% to 15% more price to farmers by bypassing middle-men.
We expect that farmers will now be better-placed to get returns on their produce.
Climate-resilient crops
Now, the focus on growth, exports, imports and generation of employment. The government is committed to doubling the farmers' income. From a focus on high-yielding seeds, now the focus is to have crops that are climate-resilient through the research of the ICAR.
They have now developed bio-fortified crop varieties, which if given to farmers, can help better quality crop with higher nutrition values. This is now being made available for 21 crops - rice, maize, soyabean, buckwheat and so on.
This will come as great help to the farmers and the grains that you will get will have more nutrition value so you don't need supplements. I am announcing this here as it will boost farmers' incomes and lead to better yields.
Focus on paediatric care
With a special focus and emphasis on children and paediatric care, we are now providing Rs 23,220 crore more only focusing on children and paediatric care.
This will be spent in this financial year itself, and it will also focus on funding of medical HR augmentation through nurses and staff and doctors, equipment and ambulances, oxygen plants. But the primary focus is on paediatric care.
Rs 15,000 crore spent through an Emergency Health Systems project last year has helped a lot. There has been a 25-fold increase in COVID-dedicated hospitals, 42-fold increase in isolation beds and 45-fold increase in ICU beds.
Pradhan Mantri Garib Kalyan Anna Yojana
This is just recalling something that the PM announced immediately after the lockdown was made last year, providing the poor with foodgrains. The Pradhan Mantri Garib Kalyan Anna Yojana provided grains and pulses from March till November, because the poor of India shouldn't go without a meal even one day during the pandemic.
Last year, the scheme was for Rs 1,33,972 crore. Again this year, the scheme was relaunched and free foodgrains will be provided till November. This will have a financial implication of Rs 93,869 crore. Just for the record, the total financial implication is Rs 2,27,841 crore.
Fertilizers
The seventh of the eight announcements for economic relief pertains to an additional amount of Rs 14,775 crore for nutrient-based subsidy for fertilizers. Record procurement of wheat has happened in this Rabi season despite the pandemic.
Rs 85,413 crore has been directly paid into farmers' accounts for the Rabi marketing season only. The existing NBF subsidy is being enhanced by Rs 14,775 crore to make it a total of Rs 42,275 crore in 2021-22.
Atmanirbhar Bharat Rozgar Yojana
The next item relates to the extension of the Atmanirbhar Bharat Rozgar Yojana to incentivise employers to create new jobs and restore loss of employment through the EPFO.
Since October till June 18, about 21.42 lakh beneficiaries in 79,000-odd establishments have gained from this. We are extending the scheme from the current deadline to June 30, 2021 till March 31, 2022.
Under the scheme, the government provides subsidy for new employees earning less than Rs. 15,000 a month through full EPF contributions (24% of salary) for two years in firms with less than 1,000 employees. For firms with over 1,000 employees, the government is bearing half of the EPF contribution. Rs 902 crore has been disbursed under the scheme so far.
Tourist guides and travel agencies
Financial support will be provided to over 11,000 registered tourist guides and travel agencies and stakeholders to help them survive the second wave. The fund for this is included in the other sectors which will get Rs 60,000 crore guarantee.
Working capital or personal loans will be provided to people in the sector to discharge liabilities and restart businesses affected by COVID-19. Loans will be provided with a 100% guarantee under the scheme to be administered by the Ministry of Tourism.
Once we start visa issuance again, the first 5 lakh tourist visas will be issued totally free of charge. This will benefit any tourist only once.
The scheme will be applicable till March 31, 2022 or till the first 5 lakh tourist visas are issued, everyone will get free tourist visas. This will have a great incentivising impact on those short term tourists who come in for just a month.
The total financial implication of this free visa scheme would be Rs 100 crore. After the expiry of the scheme, regular visa fees will be resumed.
Fresh loans through MFIs
A new scheme is being launched to facilitate loans through micro-finance institutions. We aim to reach out to 25 lakh smallest borrowers from the MFIs and would give them a maximum loan of Rs 1.25 lakh and the rate will be at least 2% below the maximum rate prescribed by the RBI.
The focus of this new credit guarantee scheme will be on new lending, not existing loans.
This scheme will be in place till March 31, 2022 or upto the exhaustion of the Rs 7,500 guarantee being extended under the scheme.
MFIs are normally widely spread in the hinterland and therefore, we want to reach out to them. There will obviously be a joint lending framework whereby the NBFC and the MFI will be in the loop.
All borrowers including defaulters of upto 89 days will be eligible for the scheme, which will have a maximum loan tenure of 3 years.
Emergency Credit Line Guarantee Scheme
An additional Rs 1.5 lakh crore has been granted under the Emergency Credit Line Guarantee Scheme, which was announced last year. This will be over and above the existing Rs 3 lakh crore corpus of the scheme.
Rs 2.69 lakh crore has already been disbursed by banks under the ECLGS.
Rs 50,000 crore for scaling up medical infrastructure
A Rs 1.1 lakh crore guarantee for COVID-affected sectors, and in that, health sector with a Rs 50,000 crore cover receives attention for scaling up medical infrastructure. This is her first announcement.
Other than 8 metropolitan cities, the health and medical infra in all other areas will be looked at. Here, the guarantee coverage will be for totally new projects (upto 75%) and projects underway (upto 50%)
A maximum loan of Rs 100 crore will be given with a capped interest rate of 7.95% and guarantee provided for 3 years. Without a guarantee, it would have cost 9-10%.
For other sectors, the interest cap is 8.25% with the same conditions.
As they progress, we will evolve the description and coverage of the scheme as their needs evolve.
"Today, we announce some relief measures. There are about 8 such measures being announced in the category of relief, four of which are absolutely new. One item is specific to health infrastructure."
There are 8 other items that pertain to growth in general, exports and employment, and in that, 6 are totally new, she says.
