Sitharaman announces 8 economic relief measures; Check key points
New Delhi, June 28: Finance minister Nirmala Sitharaman on Monday announced eight economic relief measures to boost the economy which has been hit by the second wave of COVID-19 pandemic.
Health Sector: Rs. 50,000 crore Aimed at up scaling medical infrastructure targeting underserved areas.
- Guarantee cover for expansion and new projects related to health/medical infrastructure in cities other than 8 metropolitan cities.
- Guarantee coverage: 50% for expansion & 75% for new projects
- For Aspirational Districts, guarantee cover of 75% for both new projects and expansion.
- Maximum loan: Rs. 100 crore; Guarantee duration: Up to 3 years
- Interest rate capped at 7.95%
- Guarantee by National Credit Guarantee Trustee Company Limited Other Sectors: Rs. 60,000 crore
- Interest rate capped at 8.25% p.a.
- Decisions at later stage based on evolving needsNormal interest without guarantee cover is 10-11%
Launched as part of Atma Nirbhar Bharat Package in May, 2020.
- ECLGS-1.0, 2.0 and 3.0 have resulted in credit disbursal of 2.69 lakh Crore to 1.1 crore units by 12 Public Sector Banks, 25 Private Sector Banks, and 31 Nonbanking Financial Companies
- Contact intensive sectors already covered and shall be continued. Rs 4,000 crore given to these sectors through this window so far
- Limit of admissible guarantee and loan amount proposed to be increased above existing level of 20% of outstanding on each loan
- Sector wise details will be finalized as per evolving needs
- Overall cap of admissible guarantee to be raised from Rs. 3 lakh crore to Rs. 4.5 lakh crore
Credit Guarantee Scheme to Facilitate Loans to 25 Lakh Persons Through Micro Finance Institutions (MFIs)
- Guarantee will be provided to Scheduled Commercial Banks for loans to new or existing NBFC-MFIs or MFIs for on lending upto Rs 1.25 lakh to approximately 25 lakh small borrowers
- Interest Rate on Loans from banks to be capped at MCLR plus 2%
- Maximum loan tenure 3 years, 80% of assistance to be used by MFI for incremental lending, interest at least 2% below maximum rate prescribed by RBI
- Focus on new lending, not repayment of old loans
- Loans to borrowers to be in line with extant RBI guidelines such as number of lenders, borrower to be member of JLG, ceiling on household income & debt
- All borrowers (including defaulters upto 89 days) eligible
- Guarantee cover for funding provided by MLIs to MFIs/NBFC-MFIs till March 31, 2022 or till guarantees for an amount of Rs.7,500 crore are issued, whichever is earlier.
- Guarantee upto 75% of default amount for upto 3 years through National Credit Guarantee Trustee Company (NCGTC)
- No guarantee fee to be charged by NCGTC
Financial support to more than 11,000 Registered Tourist Guides/Travel and Tourism Stakeholders
- 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
- The scheme will cover: ✓ 10,700 Regional Level Tourist Guides recognised by Ministry of Tourism and Tourist Guides recognised by the State Governments ✓ Travel and Tourism Stakeholders (TTS) recognized by Ministry of Tourism (904)
- Loans will be provided with 100 % guarantee up to the following limits:
- Rs. 10,00,000 for TTS ( per agency) • Rs. 1,00,000 for tourist guides licenced at Regional or State level
- No processing charges, waiver of foreclosure/prepayment charges. No additional collateral requirement
- Scheme to be administered by the Ministry of Tourism through NCGTC
Free Tourist Visa to 5 Lakh Tourists
- 10.93 million foreign tourists visited India in 2019, spent US $ 30.098 billion on leisure and business.
- Average daily stay for a foreign tourist in India is 21 days. Average daily spending of a tourist in India is around $34 (Rs 2400).
- Once Visa issuance is restarted, the first 5 lakh Tourists Visas will be issued free of charge.
- Benefit will be available only once per tourist
- The scheme will be applicable till 31st March, 2022 or till 5,00,000 visas are issued, whichever is earlier
- Total financial implications- Rs 100 Crore
Extension of Atmanirbhar Bharat Rozgar Yojana
- Launched on 1st Oct, 2020. Incentivizes employers for creation of new employment, restoration of loss of employment through EPFO.
- Approved outlay Rs. 22,810 crore for 58.50 lakh estimated beneficiaries. Last date for registration is 30.06.2021.
- Subsidy provided for two years from registration for new employees drawing monthly wages less than Rs. 15000 for: Both Employer's and Employee's share of contribution (total 24% of wages) for establishment strength upto 1000 employees.
Only Employee's share (12% of wages) in case of establishment strength of more than 1000.
- Benefit of Rs. 902 Cr given to 21.42 lakh beneficiaries of 79,577 establishments till 18.06.2021
- Scheme extended from 30.6.2021 to 31.03.2022
Rs. 23,220 Cr More for Public Health
- Rs 15,000 Cr Emergency Health Systems Project (2020-21) led to 25 fold increase in COVID dedicated hospitals, setting up of 7,929 COVID health centres, 9,954 COVID care centres, 7.5 times increase in oxygen supported beds, 42 fold increase in isolation beds, 45 fold increase in ICU beds.
- New scheme focused on short term emergency preparedness with special emphasis on children and paediatric care/paediatric beds.
- Rs 23,220 Cr earmarked for one year
- Funding for short-term HR augmentation through medical students (interns, residents, final year) and nursing students
- Increase availability of ICU beds, oxygen supply at central, district and subdistrict level.
- Ensure adequate availability of equipment, medicines; access to teleconsultation; ambulance services.
- Enhance testing capacity and supportive diagnostics, strengthen capacity for surveillance and genome sequencing.
Additional Subsidy for DAP & P&K fertilizers (Announced Earlier)
- Record procurement of 432.48 Lakh MT of wheat in Rabi Marketing Season
(RMS) 2021-22 (against 389.92 Lakh MT in RMS 2020-21)
- Rs 85,413 Crore paid to farmers
- Existing NBS subsidy was Rs.27,500 crores in FY 2020-21 which has been
increased to Rs. 42,275 crore in FY 2021-22
- Additional amount of Rs.14,775 crore to be provided. This includes Rs.9,125
crore additional subsidy for DAP and Rs.5,650 crore additional subsidy for NPK
based complex fertilizer
Extension of Pradhan Mantri Gareeb Kalyan Anna Yojana (PMGKAY) (Announced Earlier)
- PMGKAY was launched on 26th March 2020 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 .
- The total cost of the scheme in 2020-21 was Rs. 133,972 crore.
- In the wake of the second wave of COVID-19, the scheme was relaunched in May 2021 to ensure food security of poor/vulnerable
- 5 kg of food grains will be provided free of cost to NFSA beneficiaries from May to November 2021
- Estimated financial implications are Rs 93,869 cr, bringing the total cost of PMGKY to Rs 2,27,841 Crore