On Sunday, Finance Minister Nirmala Sitharaman announced the fifth and the last tranche of Modi government’s “Atmanirbhar Bharat Abhiyan” package worth Rs 20 lakh crores to restart the economy following the coronavirus lockdown.
Fifth tranche of announcements under “Atmanirbhar Bharat Abhiyan” economic package
Finance Minister Nirmala Sitharman began her Sunday address by quoting Prime Minister Narendra Modi’s speech to the nation. She said, “In order to prove the resolve of the self-reliant India, land, labour, liquidity and laws, all have been emphasised in this package”. She added, “We have announced several reforms in this regard and shall continue with the same today.”
“As a nation, we stand at a very crucial juncture. Such a big disaster is a signal for India, it has brought a message and opportunity,” Finance Minister said quoting Prime Minister Modi. We need now to build an ‘Atma Nirbhar Bharat’, said FM Sitharaman.
In the last four days of announcements, we have had several reforms addressing the land, labour, liquidity and laws and today’s announcements will be continuing that series, the FM Sitharaman added.
Finance Minister Nirmala Sitharaman said, “Soon after lockdown, we came with PM Garib Kalyan Package, we provided food grains to those who needed it, we did not want to scout for money to search for grains. Pulses too were given 3 months in advance. I appreciate the concerted efforts of FCI, NAFED and states, giving pulses and grains in huge quantities, despite logistical challenges.”
Finance Minister said that the last tranche will focus on 7 sectors- MGNREGS, Health (rural and urban) and Education related, businesses and coronavirus, decriminalisation of Companies Act, Ease of Doing Business, Public Sector Enterprises- related steps and state governments and related resources.
The Finance Minister said that the Modi government would like to show what they have done in the past two months in light of the coronavirus crisis. The FM added that various health-related steps that have been taken by the government. She added that Rs 15,000 crore was released by the PM and an insurance cover of Rs 50 lakhs per person for health professionals was announced.
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 required which was undertaken, she added.
The coronavirus enabled India to prove to the world that we can ramp up our production of protective equipment from 0 producers, we today have more than 300 domestic PPE manufacturers, said Finance Minister. We have given more than 11 crore HCQ tablets, the FM added.
The Modi government also said that several health reforms and initiatives put in place. The Public expenditure on health will be increased, announced Finance Minister.
The investments at grassroots for health and wellness centres both at rural and urban levels will be ramped up and all districts will have infectious disease hospital blocks. The Public health labs to be set up at block levels said FM Sitharaman.
Ease of Doing Business
Finance Minister Nirmala Sitharaman said, during coronavirus, compliance burden was a matter of concern and timely action was taken to reduce the same under various provisions of the Companies Act.
The FM added, Board meetings were allowed to be online, rights issues can be done digitally, major reform in corporate governance.
The Finance Minister added that debts related to coronavirus shall be excluded from defaults under IBC and 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,” FM added.
“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 lakh, which largely insulates MSMEs,” she added.
Minister Sitharmanan said that further key reforms for Ease of Doing Business are in the pipeline including a 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, the government clarified.
Decriminalisation of Companies Act
The Modi government has also announced decriminalising of Companies Act violations involving minor technical and procedural defaults. The FM announced that a 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 as seven compoundable offences altogether dropped and five to be dealt with under alternative framework, the centre said.
Finance Minister said that online education has been taken up in a big way. She added that ‘Swayam Prabha’ DTH channels to support and reach those who do not have access to the internet.
On the steps taken for the education sector, the finance minister said, “The direct telecast mode use by schools will now get 12 more channels. This will also help in rural areas. Provision has been made for the live telecast of teachings. We have also tied up with private operators such as Tata Sky and DTH to air educational content.”
“200 new textbooks have been added to e-Pathshala, states, provision has been made for the telecast of live interactive sessions for teachers and students, states are coordinating to share educational air-time,” added Finance Minister.
The Finance Minister announced that PM e-VIDYA programme for multi-mode access to digital or online education to be launched immediately.
She added that one each TV channel will be earmarked for class 1-12 students and extensive use of radio, community radio and podcasts, special e-content for visually and hearing-impaired children.
Top 100 universities permitted to start online courses by May 30, 2020, the FM added. An initiative to extend psycho-social support to students, teachers and families for mental health and emotional well-being to be launched immediately, known as ‘Manodarpan’.
The Finance Minister said to that budget estimate for MGNREGS was Rs 61,000 crore. To provide a fillip to employment, the government will now allocate an additional Rs 40,000 crore under the scheme.
The additional funds to MGNREGA will generate 300 crore more person days of work and will address need for work for returning migrants.
Public Sector Enterprise policy for ‘Atma Nirbhar Bharat’
The Finance Minister said that the Modi government would like to announce a public sector enterprise policy. The FM added that there is a need for a coherent policy wherein the private sector will be allowed to participate in all sectors while public sector enterprises will continue to play an important role.
The Government of India will announce a new policy which will broadly categorise strategic sectors and others and the list of strategic sectors requiring the presence of PSEs in public interest will be notified.
In such strategic sectors, at least one PSE will be there but the private sector will also be allowed and in other sectors, PSEs will be privatised, Minister Sitharaman announced. To minimise wasteful administrative costs, the number of enterprises in strategic sectors will ordinarily be only one to four, others will be privatised/merged/brought under holding companies, she added.
FM Nirmala Sitharman said that the union government recognises that like the Centre, states also facing a sharp decline in revenues. Despite this, we have extended generous support to states in this hour of need and have devolved Rs 46,038 crore in April as taxes, as per the Budgetary estimates, the FM added.
The revenue deficit grants of Rs 12,390 crore was given to states in time in April despite the centre’s stressed resources. The funds under the State Disaster Relief Fund (SDRF) of Rs 11,092 crore were released in advance in the first week of April, said FM Sitharaman. The Health Ministry released over Rs 4,113 crore for direct anti-coronavirus activities.
At the centre’s request, the RBI has also increased the Ways and Means advance limit of states by 60 per cent. The number of days states can be in continuous overdraft position was increased from the earlier 14 days to 21 days now. The number of days states can be in overdraft in a quarter increased from 32 to 50 days, said Finance Minister.
The states net borrowing ceiling for 2020-21 is Rs 6.41 lakh crore based on 3% of GSDP, and 75% thereof was authorised to them in March 2020 itself and timing is left to the states, clarified FM.
The states have so far borrowed only 14% of the limit authorised and 86% of the authorised borrowing remains unutilised. In view of the unprecedented situation, the centre has decided to accede to the request of states and increase the borrowing limits of states from 3% to 5% for 2020-21 only. This will give states extra resources of Rs 4.28 lakh crore.
The Finance Minister also said that the part of the borrowing by states will be linked to specific reforms. From 3-3.5%, the 0.5% will be an unconditional increase and the next 1% to be released in 4 tranches of 0.25%, with each tranche linked to clearly specified, measurable and feasible reform actions.
Further 0.5% will be given if milestones are achieved in at least three out of the four reform areas, the Finance Minister stated.
Reforms linkage will be in four areas – universalisation of ‘One Nation, One Ration Card’, Ease of Doing Business, Power Distribution and Urban Local Bodies.
‘Atmanirbhar Bharat Abhiyan’ – A mission for self-reliance
In his fifth address to the nation over the Coronavirus pandemic, on Tuesday Prime Minister Narendra Modi announced an economic package under ‘Atmanirbhar Bharat Abhiyan’ amounting Rs 20 lakh crore to revamp the economy which is facing a serious crisis due to the Chinese epidemic. The economic package includes the recent announcements made by the government and the Reserve Bank of India on supporting key sectors of the country.
In his speech, PM Modi said the economic package would be around the 10 per cent of the GDP.
“I announce a special economic package today. This will play an important role in the ‘Atmanirbhar Bharat Abhiyan’. The announcements made by the government on coronavirus, decisions of RBI and today’s package totals to Rs 20 lakh crore. This is 10 per cent of India’s GDP,” PM Narendra Modi said.
The Prime Minister also said the package would help every section of society, including workers, farmers, the middle class, industrial units and the MSME sector.
The stimulus will play an important role in the ‘Atmanirbhar Bharat Abhiyan’ (Self-reliant India Campaign), PM Modi said.
“India’s self-reliance will be based on five pillars — economy, infrastructure, technology-driven system, vibrant demography and demand. When India speaks of self-reliance, it does not advocate for a self-centred system. In India’s self-reliance there is a concern for the whole world’s happiness, cooperation and peace,” PM Modi said in his address.
In her first address, Finance Minister Nirmala Sitharaman had announced comprehensive relief measures on Wednesday to support various sectors including Micro, Small and Medium Enterprises, Discoms, NBFCs, Micro Insurance Institutions, etc.
In the first tranche, the Modi government had announced 16 included six measures for MSMEs, EPF, NBFCs and MFIs, discoms, contractors, real estate sector and had also put out some tax measures.
Later, on Thursday, Finance Minister Nirmala Sitharaman had declared the second tranche of the “Atmanirbhar Bharat Abhiyan” package that included relief measures to migrant workers, street vendors, housing, employment generation for tribals and small farmers.
Similarly, Finance Minister Nirmala Sitharaman and MoS Finance Anurag Thakur put out in the public regarding various relief measures in the third trance on Friday in which support measures were announced to on Agriculture and Allied Activities – fisheries, animal husbandry, dairy, etc. Some reforms pertaining to governance and administrative reforms were also announced.
On Saturday, Finance Minister Nirmala Sitharaman had announced the fifth tranche of the economic package which focussed on coal, minerals, defence production, airspace managements/airports/MRO, power distribution companies in UTs, the space sector and atomic energy.