Final tranche of economic package | States' borrowing limits raised conditionally from 3% to 5% of State GDP, says FM

Finance Minister Nirmala Sitharaman during her fifth press conference on Aatmanirbhar Bharat Abhiyan stimulus package at National Media Centre in New Delhi on Sunday.

Finance Minister Nirmala Sitharaman during her fifth press conference on Aatmanirbhar Bharat Abhiyan stimulus package at National Media Centre in New Delhi on Sunday.   | Photo Credit: Shiv Kumar Pushpakar

Union Finance Minister Nirmala Sitharaman, in a press conference on Sunday, said that the focus of the fifth and final tranche of economic package will be on reforms.

She said the package would focus on seven steps that are being taken by the government with regard to reforms in MGNREGS, healthcare and education, businesses, de-criminalisation of the Companies Act, ease of doing business, public sector undertakings, and resources related to State government.

The Union Minister had earlier made four announcements on the Aatmanirbhar Bharat Abhiyan stimulus package on Wednesday, Thursday, Friday, and Saturday. The Hindu's Deputy Editor Priscilla Jebaraj is reporting on today's press conference from Delhi.

Read the Part 5 of the economic package in detail here.

Here are the updates:

12.55 pm

Is it not dramebaazi to sit with migrants on the road?: FM reacts to Congress criticism

Responding to Congress' criticism on migrant workers being forced to walk to their hometowns, Finance Minister Nirmala Sitharaman said that the State and central governments need to work together on this.

Congress-led State governments should ask the Centre for more trains, she said.

"Don't waste their time sitting with them on the roads, she says. Is it not dramebaazi to sit with migrants on the road? Let us deal with migrants more responsibly rather than doing politics," she said in an apparent dig at Rahul Gandhi, who was photographed talking to migrant workers at Delhi’s Sukhdev Vihar area.

12.40 pm

 

The Finance Minister said that the break-up of the total stimulus amounts to ₹20.97 lakh crore, and is as follows.

Stimulus from earlier measures:

Revenue lost due to taxes since March 22: ₹7,800 crore

Pradhan Mantri Garib Kalyan Yojana: ₹1.7 lakh crore

Health: ₹15,000 crore

RBI measures: ₹8.01 lakh crore

The break-up of announcements made during all five tranches are as follows:

Tranche 1: ₹5.94 lakh crore

Tranche 2: ₹3.1 lakh crore

Tranche 3: ₹1.5 lakh crore

Tranche 4&5: ₹48,100 crore

12.30 pm

12 lakh EPFO members withdraw ₹3,360 crore retirement savings during lockdown: FM

Finance Minister Nirmala Sitharaman said around 12 lakh members of the Employees’ Provident Fund Organisation (EPFO) withdrew ₹3,360 crore retirement savings during the coronavirus-induced lockdown.

The EPFO, under the Union labour and employment ministry, has settled a total of 12 lakh claims under the Pradhan Mantri Garib Kalyan Yojana (PMGKY) package.

Ms. Sitharaman also told that 2.2 crore building and construction workers got ₹3,950 crore under the PMGKY to sustain in lockdown.

12.25 pm

States' borrowing limits raised

The States' borrowing limits are to be raised from 3% to 5% of State GDP, announced the Finance Minister. This means an extra ₹4.28 lakh crore will be made available to the States, she said.

This increase of borrowing limits from 3% to 5% of GDP was done on the request of State governments. However, FM noted that States have so far only borrowed 14% of their already authorised limit, which was based on 3% of their GDP.

Increase in limits conditional

This increase in borrowing limits is conditional, linked to specific reforms, said Nirmala Sitharaman. The first 0.5% increase from 3% to 3.5% is unconditional, she said.

The next four tranches of 0.25% each will be linked to clearly specified, feasible and measurable reform action inthe following areas —   reforms linked to 'One Nation, One Ration Card', ease of doing business, power distribution issues and urban local body revenue, she said.

The remaining 0.5% will be given as soon as milestones are achieved in at least three of these four areas, added the FM.

12.15 pm

Centre extending support to States: Nirmala Sitharaman

lFM Nirmala Sitharaman said that like Centre, States are also facing a sharp decline in their revenues.

Central support extended to States so far includes devolution of taxes worth ₹46,038 crore in April based on budget estimates, although actual revenue shows unprecedented decline in comparison to budget estimates, she said.

Revenue deficit grants worth ₹12,390 crore were released to States on time for April and May, she added.

The FM said that an advance release of State Disaster Relief Funds worth ₹11,092 crore was done in the first week of April.

The Health Ministry released ₹4,113 crore to States for anti-COVID 19 activities. RBI also taken actions to ease States' finances, she said.

12.05 pm

7) On public sector policy

Finance Minister Nirmala Sitharaman said a new “coherent” public sector enterprises policy will be formulated that will define strategic sectors which will have not more than four PSUs.

List of strategic sectors requiring presence of public sector undertakings (PSUs) in public interest will be notified, she said. All sectors will be open to private sector enterprises also, she added.

Industry sectors will be divided into strategic sectors and others, she said, adding that in sectors notified as strategic, at least one public sector enterprise will still be present, but private sector will also be allowed. In other sectors, public sector enterprises will be privatised.

In strategic sectors, there will be only four or fewer public sector enterprises, while others will be privatised, merged or brought under holding companies.

“To minise wasteful administrative costs, number of enterprises in strategic sectors will ordinarily be only one to four; others will be privatised/merged/brought under holding companies,” she said.

12 pm

4) On business and COVID-19

In a bid to give relief to companies defaulting on loans due to the COVID-19 stress, Finance Minister Nirmala Sitharaman said no fresh insolvency will be initiated for one year under the Insolvency and Bankruptcy Code.

Also, coronavirus-related debt will be excluded from definition of default, she said.

Minimum threshold to initiative insolvency proceeding has been raised to ₹1 crore from ₹1 lakh to benefit MSMEs, she said adding that an Ordinance will be promulgated to bring this change in IBC.

5) On ease of doing business

The Finance Minister said that government will premit companies to directly list their securities in permissible foreign jurisdictions.

Private companies which list non-convertible debentures on stock exchanges will not classify companies as listed companies, said Ms. Sitharaman.

6) On decriminalising the Companies Act

The Finance Minister announced decriminalisation of the Companies Act in violations involving minor technical and procedural defaults including shortcoming in CSR reporting, inadequacies in board report, filing defaults and delay in holding AGM.

Majority of the compoundable offences sections will be shifted to internal adjudication mechanism (IAM), she said adding that amendments will be brought through an Ordinance and will de-clog the criminal courts and NCLT.

Seven compoundable offences under the Companies Act altogether dropped and five to be dealt with under alternative framework, she said.

11.55 am

3) Education during COVID-19:

Top 100 universities will be automatically allowed to start online classes from May 30, 2020, as was announced previously.

In addition to this, the PM e-vidya programme for multi-mode access to digital education will be launched. This includes:

- DIKSHA digital platform will provide e-content and QR coded textbooks for all classes for school education across the country.

- One earmarked TV channel for each class. There will be extensive use of radio, community radio and podcasts.

- Special e-content for visually and hearing impaired children.

11.50 am

Seven steps to be announced today: FM

The Finance Minister said that seven steps would be announced today with regard to the economic stimulus package. This includes MGNREGS, education, health (rural and urban), business and COVID-19, decriminalisation of Companies Act, measures for ease of doing business, public sector enterprises and State governments' resources.

1) On MGNREGS

Centre to allocate an additional  ₹40,000 crore to MGNREGS in addition to the budget estimate of ₹61,000 crore, to ensure that workers returning to villages are provided employment, especially through the upcoming monsoon period.

2) On health infrastructure

Public expenditure on health to be increased. Investments in grassroots health institutions and wellness centres in rural and urban areas to be increased as well.

In addition to this, all districts to have infectious diseases blocks set up in their hospitals. Public health labs to be set up in every block.

11.40 am

Finance Minister Nirmala Sitharaman continues her pre-announcement address:

Action taken already to contain COVID-19 on the health front include announcements worth ₹15,000 crore.

Out of this ₹4,113 crore has been released to the States, ₹3750 crore has been given for essential items, ₹550 crore for testing labs and kits, and ₹50 lakh per person insurance cover for health workers.

11.20 am

FM continues the introduction to the fifth tranche of economic package:

Lives were given first priority in Pradhan Mantri Garib Kalyan Yojana. But now, it is important also to support livelihoods in post-COVID era. When lockdown gets lifted, and when businesses also come back after stressful conditions, they will need support. Need to create supportive environment.

Today's announcements will be related to steps taken on MGNREGS, rural and urban health, education during COVID-19, businesses, decriminalisation of Companies Act, ease of doing business, public sector enterprises, and State government resources.

11 am

Today's focus is on reforms: Finance Minister

FM Nirmala Sitharaman begins the presser. She is accompanied by Minister of State for Finance Anurag Thakur, among others.

She begins the presser with one of Prime Minister Narendra Modi's statements from the recent address to the nation: "As a nation, we stand at a very crucial junction. Such a big disaster is a signal for India. It has brought a message and an opportunity."

The PM had said that this current situation was both a crisis and an opportunity, says Ms. Sitharaman. In order to build a self-reliant India, PM said that we need to focus on land, labour, liquidity and laws, she says.

"This is why the last two days have been focussed on reforms in these areas. Today's announcement will be along the same lines," says FM.

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Printable version | Sep 26, 2020 2:03:22 AM | https://www.thehindu.com/news/national/nirmala-sitharaman-press-conference-live-updates-fm-to-announce-fifth-phase-of-economic-package/article31605909.ece

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