Daijiworld Media Network - New Delhi (SHP)

New Delhi, May 17: Finance minister Nirmala Sitharaman on Sunday, May 17 announced the details of the fifth and final tranche of Rs 20 lac crore economic package. Earlier on Saturday, she had stated that the Centre would introduce competition, transparency and private sector participation in the coal sector and towards infrastructure development of Rs 50,000 crore.

She began her presser with a quote by Prime Minister Narendra Modi saying, "Turning crisis for India into an opportunity."

Sitharaman addressing the press said that the PM Garib Kalyan Package undertook the task of providing food grains to those in need. She praised the efforts of FCI, NAFED and states, who provided pulses and grains in huge quantities, despite logistical challenges.

The finance minister stated that the fifth tranche would focus on areas of - MGNREGS, Health (rural and urban) and Education, Businesses and COVID-19, Decriminalisation of Companies Act, Ease of Doing Business, Public Sector Enterprises and State governments and related resources.

Amid the COVID-19 crisis, Sitharaman listed out the steps taken by the Centre, "Rs 15,000 crore was released by the PM for providing insurance cover of Rs 50 lac per person for health professionals. The government made sure telemedicine comes into play, capacity building exercises have been taken up, for protection of health care workers, amendment of Epidemic Diseases Act was also undertaken."

She also asserted that the Shramik special trains were started when workers could move and that the 85 per cent cost of the tickets was borne by the Central government.

Sitharaman also pointed out the evolution of education in India amid the pandemic. She said that the SWAYAM PRABHA DTH channels helped in reaching to those who do not have access to the internet and made provisions for the telecast of live interactive sessions.

Concerning one of the seven focus areas of the fifth tranche, Nirmala Sitharam pointed out that the budget estimate for MGNREGS is now at Rs 61,000 crore. "Government will now allocate an additional Rs 40,000 crore under the scheme. This will generate 300 crores more person-days of work and will address the need for work for returning migrants," she added.

She also announced that the government will increase public expenditure on health. It will involve increase in the number of health and wellness centres in rural and urban areas, setting up of infectious disease hospital blocks in all districts, building integrated public health laboratories in every district, encouraging research by the national institutional platform for one health by ICMR and implementation of national digital health mission.

The Finance Minister also announced that a technology-driven education will be the focus. "PM e-Vidya programme for multi-mode access to digital/online education to be launched immediately. Top 100 universities will be permitted to automatically start online courses by May 30, 2020," she proclaimed.

Further, Sitharaman also made announcements stating that the debts related to COVID-19 shall be excluded from defaults under IBC. "No fresh insolvency proceeding will be initiated up to 1 year. At the moment MCA has extended this by 6 months, we intend to extend this by another 6 months. For MSMEs, a special insolvency framework will be notified under section 240-A of IBC. The minimum threshold to initiate insolvency proceedings raised to Rs 1 crore from the earlier Rs 1 lac, which largely insulates MSMEs."

FM also announced decriminalization of Companies Act defaults, where she dropped seven compoundable offences. Decriminalising of Companies Act violations involving minor technical and procedural defaults. Majority of compoundable offences sections to be shifted to internal adjudication mechanism (IAM) and powers of RD for compounding enhanced (58 sections to be dealt with under IAM as compared to 18 earlier). The amendments will de-clog the criminal courts and NCLT. The seven compoundable offences would be altogether dropped and five will be dealt under an alternative framework.

While announcing measures for ease of doing business for corporate, the Finance Minister pointed out that the Indian public companies were now allowed to list their securities directly in foreign jurisdictions.

"Direct listing of securities by Indian public companies in permissible foreign jurisdictions. Private companies that list non-convertible debentures (NCDs) on stock exchanges not to be regarded as listed companies," Sitharaman added.

The Finance Minister declared all sectors will be open for the private sector while public sector enterprises will play an important role in defined areas. "The government will put in place a new policy where: List of strategic sectors requiring the presence of PSEs in the public interest will be notified. In the strategic sector, at least one enterprise will remain in the public sector. However, the private sector will also be allowed. In other sectors, PSEs will be privatised. To minimize wasteful administrative costs, the number of enterprises in strategic sectors will be between one to four, others will be privatised, merged or brought under holding companies," she announced.

Sitharaman maintained that the states net borrowing ceiling for 2020-21 is Rs 6.41 lac crore based on 3 per cent of GSDP. "Over 75 per cent was authorised to them in March 2020, but the states have so far borrowed only 14 per cent of the authorised limit. Around 86 per cent of the authorised borrowing remains unutilized," she said.

Given the pandemic crisis prevailing in the country, the Centre has decided to increase the borrowing limit of the states from 3 per cent to 5 per cent only for 2020-21. "This will give states extra resources of Rs 4.28 lac crore," Sitharaman added.

"Part of the borrowing by states will be linked to specific reforms. From 3-3.5 per cent, 0.5 per cent will be an unconditional increase. Next 1 per cent to be released in 4 tranches of 0.25 per cent, with each tranche linked to clearly specified, measurable, and feasible reform actions. Further 0.5 per cent will be given if milestones are achieved in at least three out of the four reform areas," she maintained.

Addressing the issue of the drop in revenue for states, Sitharaman said, "The state is also witnessing a sharp drop in revenues. Over Rs 46,038 crore were devolved as tax revenue to states. Over Rs 12,000 crore were also dispensed on time. The Health Ministry has also released over Rs 14,000 crore. The RBI in a very timely step has increased ways of advancing limits for states by 60 per cent. The number of days a state can be in an overdraft situation in a quarter has been raised."

The Finance Minister then gave the break up of Rs 20 lac crore economic package.

Tranche 1: Package costing - Rs 5,94,550 crore

Emergency working capital facility for businesses including MSMEs: Rs 3 lac crore
Subordinate debt for stressed MSMEs: Rs 20,000 crore
Fund of fund for MSMEs: Rs 50,000 crore
EPF support for businesses and workers: Rs 2,800 crore
Reduction in EPF rates: Rs 6,750 crore
Special liquidity scheme for NBFCs, HFCs and MGIS: Rs 30,000 crore
Partial credit guarantee scheme 2.0 for liabilities of NBFCs and MFIs: Rs 45,000 crore
DISCOMS: Rs 90,000 crore
Reduction in TDS/TCS rates: Rs 50,000 crore

Tranche 2: Package costing - Rs 3,10,000 crore

Free food grain supply for migrant workers for 2 months: Rs 3,500 crore
Interest subvention for MUDRA Shishu loans: Rs 1,500 crore
Special credit facility for street vendors: Rs 5,000 crore
Housing CLSS-MIG: Rs 70,000 crore
Additional emergency WCF through NABARD: Rs 30,000 crore
Additional credit through KCC: Rs 2 lac crore

Tranche 3: Package costing - Rs 1,50,000 crore

Food Micro Enterprises: Rs 10,000 crore
PM Matsya Sampada Yojana: Rs 20,000 crore
TOP to TOTAL Operation Greens: Rs 500 crore
Agri Infrastructure Fund: Rs 1 lakh crore
Animal Husbandry Infrastructure Development Fund: Rs 15,000 crore
Promotion of Herbal Cultivation: Rs 4,000 crore
Beekeeping initiative: Rs 500 crore

In the end, the Finance Minister while provided a tranche wise break up including the final two tranches. Value of first tranche - Rs 5.95 lac crore, including Rs 3 lac crore emergency working capital facility for MSMEs, business; Rs 90,000 crore liquidity infusion for DISCOMS. The second tranche is worth Rs 3.1 lac crore total, including, Kisan Credit Card, additional credit Rs 2 lac crore. The third tranche of the stimulus is worth Rs 1.5 lac crore, including Rs 1 lac crore for the agriculture infrastructure fund. The last two tranches of the economic package, fourth and the fifth is worth Rs 48,100 crore. Therefore, the sum of all the five tranches comes to total of Rs 20,97,053 crore.

Towards the end of the presser, the Finance Minister urged the Opposition to not politicise the matter concerning migrant workers. "I want to tell the Opposition party that on the issue of migrants we all must work together. We are working with all states on this issue. With folded hands, I ask Sonia Gandhi ji that we must speak and deal with our migrants more responsibly,” said the Finance Minister Nirmala Sitharaman.