FM Nirmala Sitharaman announces Rs 6,28,993 crore to give wings to Indian economy amid pandemic

In bid to provide relief to various sectors affected due to the second wave of COVID-19 pandemic Union Finance Minister Nirmala Sitharaman announced a series of measures amounting to Rs. 6,28,993 crore in New Delhi. Through these measures she also aimed at preparing the health systems for emergency response besides providing impetus to growth and employment.
A total of 17 measures amounting to Rs. 6,28,993 crore were announced. These included two measures announced earlier, i.e. the additional Subsidy for DAP & P&K fertilizers, and extension of Pradhan Mantri Garib Kalyan Anna Yojana (PMGKAY) from May to November, 2021.
These measures were broadly announced under three different categories including: Strengthening Public Health, Economic Relief from Pandemic and Impetus for Growth & Employment. Besides providing economic relief to the businesses and the people affected by the pandemic, these measures have a special focus on health and the revival of travel and tourism sectors. Under these measures Ms Sitharaman announced Rs 1.10 lakh crore loan guarantee scheme for the sectors affected by the pandemic and this scheme includes Rs 50,000 crore for health sector as well as Rs 60,000 crore for various other sectors including tourism.
The impetus being given to the health sector is aimed at scaling up medical infrastructure especially in underserved areas and the guarantee cover will be available both for new projects as well as for the expansion of the existing projects related to medical and health infrastructure in the cities. The 8 metropolitan cities have not been included in this scheme and Rs 100 crore is the maximum loan admissible under the scheme with guarantee duration up to 3 years. On these loans the banks are allowed to charge a maximum interest of 7.95% while the loans for other sectors shall be available with interest cap of 8.25% per annum. Obviously these loans are much cheaper if compared to the normal interest rates without guarantee of 10-11%.
The government has also expanded the existing Emergency Credit Line Guarantee Scheme (ECLGS) by Rs 1.5 lakch crore. Already the ECLGS has received good response with Rs 2.73 lakh crore already being sanctioned while Rs 2.10 crore already disbursed. The limit of admissible guarantee and the loan amount is proposed to be increased above the existing level of 20 per cent of outstanding on every loan.
Credit Guarantee Scheme for Micro Finance Institutions is another important measure announced by the finance minister today. The scheme aims to provide relief to the smallest of the borrowers being served by Micro Finance Institutions’ network. Under this scheme, the scheduled commercial banks will be provided guarantee for loans given to the existing or new NBFC-MFIs for on lending up to Rs 1.25 lakh to over 25 lakh small borrowers.
To strengthen the tourism sector and to provide relief to the people engaged in this sector the FM has come up with a scheme for the tourists guides and the other stakeholders. The government has announced a new loan guarantee scheme for the sectors affected by COVID and under this scheme, the people working in tourism sector will be provided personal loans/working capital for their discharge liabilities and to restart their businesses impacted due to the pandemic.
The scheme will encompass 10700 regional tourist guides recognized by the ministry of tourism as well as the tourist Guides recognised by the State Governments. It will also include over 1,000 travel and tourism stakeholders recognized by Ministry of Tourism. These individuals will be eligible to get a loan upto Rs. 10 lakh each. Among them the tourist guides can avail loan upto Rs 1 lakh each. These loans will not have any processing charges and there will be waiver of foreclosure/prepayment charges with no requirement of any additional collateral. The interest rates will be at least 2% below the maximum rate prescribed by the Reserve Bank of India. The FM has also announced to offer free one month tourist visa to 5 lakh tourists. She has also extended the Aatma Nirbhar Bharat Rozgar Yojana (ANBRY) and the scheme incentivizes the employers for restoration of the loss of employment. The government has also announced an increase in the subsidy to the farmers to Rs. 42,275 crore in FY 2021-22 on the existing NBS subsidy of Rs 27, 500 crore announced in FY 2021-22. Under the Pradhan Mantri Garib Kalyan Yojana from May to November 2021, the FM has announced to offer free food grains.
To support the public health front the FM has announced additional Rs. 23,220 crore and the scheme emphasizes upon the children and paediatric care/paediatric beds. She has also announced a new scheme to strengthen human resources and the health infrastructure with Rs 23, 220 crore outlay. Release of climate resilient special traits varieties has been announced with focus on the development of higher yield crop varieties.
Credit Guarantee Scheme for Micro Finance Institutions is another important measure announced by the finance minister today. The scheme aims to provide relief to the smallest of the borrowers being served by Micro Finance Institutions’ network. Under this scheme, the scheduled commercial banks will be provided guarantee for loans given to the existing or new NBFC-MFIs for on lending up to Rs 1.25 lakh to over 25 lakh small borrowers.
To strengthen the tourism sector and to provide relief to the people engaged in this sector the FM has come up with a scheme for the tourists guides and the other stakeholders. The government has announced a new loan guarantee scheme for the sectors affected by COVID and under this scheme, the people working in tourism sector will be provided personal loans/working capital for their discharge liabilities and to restart their businesses impacted due to the pandemic.
The scheme will encompass 10700 regional tourist guides recognized by the ministry of tourism as well as the tourist Guides recognised by the State Governments. It will also include over 1,000 travel and tourism stakeholders recognized by Ministry of Tourism. These individuals will be eligible to get a loan upto Rs. 10 lakh each. Among them the tourist guides can avail loan upto Rs 1 lakh each. These loans will not have any processing charges and there will be waiver of foreclosure/prepayment charges with no requirement of any additional collateral. The interest rates will be at least 2% below the maximum rate prescribed by the Reserve Bank of India. The FM has also announced to offer free one month tourist visa to 5 lakh tourists. She has also extended the Aatma Nirbhar Bharat Rozgar Yojana (ANBRY) and the scheme incentivizes the employers for restoration of the loss of employment. The government has also announced an increase in the subsidy to the farmers to Rs. 42,275 crore in FY 2021-22 on the existing NBS subsidy of Rs 27, 500 crore announced in FY 2021-22. Under the Pradhan Mantri Garib Kalyan Yojana from May to November 2021, the FM has announced to offer free food grains.
To support the public health front the FM has announced additional Rs. 23,220 crore and the scheme emphasizes upon the children and paediatric care/paediatric beds. She has also announced a new scheme to strengthen human resources and the health infrastructure with Rs 23, 220 crore outlay. Release of climate resilient special traits varieties has been announced with focus on the development of higher yield crop varieties.
Apart from all these, the FM has announced measures to revive the North Eastern Regional Agricultural Marketing Corporation (NERAMAC) that aims to aims to enhance agricultural, procurement, processing and marketing infrastructure in North-East. In a nutshell a revival package of Rs 77.45 crore shall be given to NERAMAC. Sitharaman has also come up with Rs. 33,000 crore boost for Project Exports through NEIA, the national export insurance account. Export Insurance Cover boost of Rs 88,000 crore and Rs 19,041 crore boost to digital India for broadband in PPP model, besides extension of the tenure of PLI scheme for the manufacturing of large scale electronics.
The FM has also announced Rs 3.03 lakh crore for Reform-Based Result-Linked Power Distribution Scheme, besides the new streamlined process for PPP projects as part of the relief package.