Cabinet clears stimulus package proposals

In the first step towards implementing the Aatmanirbhar stimulus package announced by Finance Minister Nirmala Sitharaman last week, the Union Cabinet approved a slew of proposals at its meeting on Wednesday.

These include a subsidy of almost ₹3,110 crore for distribution of extra foodgrains to about eight crore migrant workers and their families.

The extra free ration will be distributed by the States in May and June, and the entire cost will be borne by the Centre. Most of the other schemes are spread over a longer period of time and call for both the Centre and the States to share costs, or involve funding for a corpus which would be used to extend credit to various businesses. For instance, the Centre will provide a corpus of ₹41,600 crore over the current and the next three financial years to facilitate an additional funding of up to ₹3 lakh crore to small businesses by way of an Emergency Credit Line Guarantee Scheme. Under it, 100% guarantee coverage will be provided to lenders by the National Credit Guarantee Trustee Company Limited. Loans must be sanctioned by the end of October 2020 or before the sum of ₹3 lakh crore runs out.

Non-banking financial and housing finance companies will benefit from a special liquidity scheme for which the direct financial implication for the Centre will be ₹5 crore. However, the Centre is providing an aggregate guarantee of ₹30,000 crore to these stressed institutions. The Cabinet also approved an extension of and modifications to an existing partial credit guarantee scheme for such institutions.

Food processing units

The Cabinet also approved a new centrally-sponsored scheme to support micro food processing units at an outlay of ₹10,000 crore, the expenditure being shared by the Centre and the States on a 60:40 basis.

It also approved the Pradhan Mantri Matsya Sampada Yojana, a scheme announced in the 2020 Budget, to develop the fisheries sector over a five-year period.

Of the total investment of ₹20,050 crore, the Centre will spend ₹9,407 crore, the States ₹4,880 crore while beneficiaries themselves will have to invest about ₹5,763 crore. The Cabinet Committee on Economic Affairs also approved the adoption of a new methodology for the auction of coal and lignite blocks on a revenue-sharing basis. The tenure of coking coal linkage was increased to 30 years.

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Printable version | Mar 6, 2021 5:14:18 AM |

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