Rs40,000 cr additional announced under MNREGA
This was the highlight of the finance Minister Nirmala Sitharaman’s fifth day announcements that saw seven initiatives in all.
The Central Government on Sunday conceded the demand from majority of the states to allow them to borrow up to 5 per cent of their respective GDP up from the three per cent allowed under the FRBM Act.
The finance minister announced the fifth and last tranche of the economic package under “Atmanirbhar Bharat Abhiyan (Self-reliant India campaign)” scheme on Sunday where she listed seven steps including Mahatma Gandhi National Rural Employment Guarantee Act (MNREGA), health and education–related sector, businesses and COVID-19, decriminalisation of Companies Act, Ease of Doing Business, Public Sector Enterprises-related steps, state governments and related resources.
“In order to prove the resolve of the self-reliant India, land, labour, liquidity and laws, all have been emphasised in this package,” said Sitharaman.
She also hailed the Food Corporation of India (FCI) and National Agricultural Cooperative Marketing Federation (Nafed) and states for giving pulses and grains in huge quantities to the poor during the on–going nationwide lockdown against various challenges in logistics.
Sitharaman said the additional Rs40,000 crore announced under MNREGA will generate 300 crore more person-days of work and will be address the need for work for the returning migrants.
Health and Education sector
The minister said that public expenditure on health will be increased. She said that the investments at grassroots for health and wellness centres both at rural and urban levels will be ramped up. All districts in India will have infectious disease hospital blocks. “This apart, public health labs will be set up at block levels,” Sitharaman said.
Technology-driven education through DIKSHA
The FM said that PM e-VIDYA programme for multi-mode access to digital and online education will be immediately launched. She added that there will be one earmarked TV channel for class 1-12, and there will be extensive use of radio, community radio and podcasts, special e-content for the visually and hearing-impaired students.
The FM also said that top 100 universities have been permitted to start online courses by May 30. This apart, Sitharaman also said that an initiative to extend psycho-social support to students, teachers and families for mental health and emotional well-being called Manodarpan will be launched immediately.
No fresh IBC cases for one year
The minister said that debts that are related to the COVID-19 shall be excluded from defaults under IBC and added that no fresh insolvency proceedings will be initiated up to one year. Sitharaman said that at present the MCA has extended this by 6 months and the government intends to extend this by another 6 months.
The finance minister said that for MSMEs, a special insolvency framework is going to be notified under section 240-A of the IBC. The minimum threshold to initiate the insolvency proceedings is raised to Rs1 crore from the earlier Rs1 lakh in the case of MSME.
Under the Companies Act, the minister said that majority of compoundable offences sections will be shifted to internal adjudicating mechanisms. The amendments, she said, will de-clog the criminal courts of the country and the National Company Law Tribunal (NCLT).
Ease of Doing Business
Nirmala Sitharaman also said that direct listing of securities by the public companies can be done in permitted foreign jurisdictions. Separately, she said that private companies which list non-convertible debentures (NCDs) on the stock exchanges will not to be considered as listed companies.
Public Sector Enterprise Policy
The FM said that India needs a policy wherein the private sector will be allowed to participate in all the sectors while the public sector enterprises will still continue to play a key role. She said that the government will announce a new policy which will broadly categorise the strategic sectors and other sectors. A list of strategic sectors that require the presence of public sector enterprises in the interest of the public will also be notified. Sitharaman said that in the strategic sectors, at least one public sector enterprise will be there, However, the private sector will also be allowed in it.
In other sectors, the public sector enterprises will get privatised. The number of enterprises in the strategic sectors will generally be only one to four, and others will be privatised/or/brought under holding companies so as to minimise the administrative costs.
Speaking on the support which has been extended to state governments, the finance minister said, “Like the Centre, the state is also witnessing a sharp drop in revenues. Over Rs46,038 crore was devolved as tax revenue to states. Over Rs 12,000 crore was also dispensed on time as part of revenue deficit finance. The Health Ministry has also released over Rs14,000 crore. The RBI in a very timely step has increased ways & means advance (W&A) limits for states by 60 per cent. The number of days a state can be in overdraft during a quarter has also been raised.”
How the Rs20 trillion-package is built
Earlier measures: Rs1,92,000 crore
Tranche 1: Rs5,94,550 crore
Tranche 2: Rs3,10,000 crore
Tranche 3: Rs1,50,000 crore
Tranche 4+5: Rs 48,100 crore
RBI measures: Rs 8,01,603 crore
Total: 20,97,053 crore