Nirmala Sitharaman Press Conference Highlights: Loan Guarantee For Covid-Hit Sectors, ECLGS Expanded And More

Finance Minister Nirmala Sitharaman announced a series of measures aimed towards reviving the Indian economy.

Among her announcements were further funds for the government's emergency credit guarantee scheme, increased allocation towards public health, and a new loan guarantee scheme to help small borrowers.

Here are the key highlights from the finance minister's presentation:

• Loan guarantees worth Rs 1.1 lakh crore to be provided for Covid-hit sectors.

• Size of emergency credit guarantee scheme to be increased to Rs 4.5 lakh crore from Rs 3 lakh crore.

• Government to offer guarantees to banks for lending to microfinance sector.

• Loan guarantees to be given for tourism sector under the emergency credit guarantee scheme.

• Free visa for first 5 lakh tourists once borders reopen.

• Atmanirbhar Bharat Rozgar Yojana extended till March 31, 2022.

• An additional Rs 23,220 crore has been earmarked for public health in FY22.

• BharatNet plan expanded with an additional Rs 19,041 crore.

• Tenure of performance-linked incentive scheme for electronic manufacturing extended by a year.

Watch the press conference and track all updates here...

The finance minister provided further details on the Rs 3.03 lakh crore power distribution scheme that was announced in the Union Budget 2021.

The scheme is to provide financial assistance to power distrubtors for infrastructure creation, upgradation.

State specific intervention to be designed rather than a one-size-fits-all apprpach.

Central government contribution at Rs 97,631 crore.

The government will extend the performance-linked incentive scheme for large scale electronic manufacturing by a year to 2025-26.

The scheme, which was launched in 2020-21, provides incentives of 4-6% on incremental sales of goods under targetted segments that are manufactured in India.

Companies will be able choose any five years from within that time period.

The government will spend an additional Rs 19,041 crore for BharatNet that aims to expand broadband connectivity to all inhabited villages.

The total outlay for BharatNet will be Rs 62,109 crore, with about Rs 42,068 crore have already been approved in 2017.

BharatNet will be implented in a public-private partnership in 16 states.

The finance minister said that the government has proposed to infuse equity of Rs 88,000 crore in Export Credit Guarantee Corporation over the next five years.

The ECGC promotes exports by providing credit insurance services. Its products support a third of India's merchandise exports, the minister said.

The central government will provide an additional Rs 33,000 crore to the National Export Insurance Account over 5 years.

The funds will be to provide cover to buyers' credit given by the EXIM bank, and for cover to less creditworthy borrowers. It will also be to support project exporters.

The finance minister said the government proposed an infusion of Rs 77.45 crore to revive the North Eastern Regional Agriculture Marketing Corporation.

The government said it has prepared a business plan to give 10-15% higher prices to farmers by bypassing middlemen.

The government has released 21 varieties of rice, peas, millet, maize, soyabean, quino, buckweat and other crops that are expected to be climate resilient.

The ICAR has developed these "bio-fortified" crop varieties that have higher nutrients, the finance minister said.

The finance minister said that the central government will provide Rs 23,220 crore towards public health, particularly for pediatric health care.

The funds have been earmarked to be spent in FY22, the minister said.

Apart from pediatric care, which will be the focus, the funds will also be used for short-term human resource augmentation through medical students, increasing ICU beds, oxygen supply and ensuring aduequate availability of medicines.

The finance minister said that the Atmanirbhar Bharat Rozgar Yojana, a scheme to incentivise job creation, will be extended till March 31, 2022.

The scheme was to expire on June 30, 2021.

Under the scheme, the government provides subsidy for two years for new employees that draw monthly wages less than Rs 15,000.

Finance Minister said that benefits worth Rs 902 crore have been given to 21.42 lakh beneficiaries till June 18.

The government will waive off fees for the first 5 lakh tourist visas issued in India, in an attempt to aid its tourism sector.

The benefit will be available only once per tourist. The scheme will be applicable till March 31, 2022 or till 5 lakh visas have been issued. The scheme will start when borders reopen and visas start being issued once again.

This is likely to cost the government around Rs 100 crore.

Finance minister said that capital and personal loans wll be provided to the tourism sector in the credit guarantee scheme for Covid-hit sectors.

The scheme will cover 10,700 regional level tourist guides and 904 stakeholders in the travel sector, the minister said.

Loans will be provided with 100% gurantee for loans up to Rs 10 lakh for agencies, and Rs 1 lakh for individual tourist guides.

The finance minister has launched will offer Rs 7,500 crore in guarantees that will be provided for banks for lending to the microfinance sector.

The centre will guarantee loans to new or existing microfinanciers for lending up to Rs 1.25 lakh per household to small borrowerrs, she said.

The interest rates on loans from banks will be capped at MCLR plus 2%. The maximum loans tenure will be 3 years and 80% of the assistance has to be used by the MFIs on incremental lending.

The central government will give out additional loans worth Rs 1.5 lakh crore under the the Emergency Credit Line Guarantee Scheme.

The overall cap of guarantees have been raised to Rs 4.5 lakh crore, from Rs 3 lakh crore earlier, the minister said.

The scheme had been launched last year after the first wave to offer loans to businesses hit by the pandemic.

Till now, up to Rs 2.69 lakh crore credit has been dibursed under the scheme.

The finance minister has announced a Rs 1.1 lakh crore loan guarantee scheme for Covid-impacted sectors.

Of this Rs 50,000 crore worth of loan guarantees will be for the health sectors, and Rs 60,000 crore for other sectors, Sitharaman said.

The central government will give 75% loan coverage for health infrastructure projects. The interest rate for these loans will be capped at 7.95%.

For other sectors, the interest rate cap is at 8.5%

Nirmala Sitharaman said she will announce eight relief measures for the economy—only four of which are new. The announcements will be around health infrastructure, employment and growth.

Finance Minister Nirmala Sitharaman will address a press conference at time the government is looking to revive the Indian economy ravaged by the deadlier second wave of the Covid-19 pandemic.

Sitharaman will hold the press conference at 3 p.m. on Monday, the Ministry of Finance said in a tweet.

Earlier during the day, India's Principal Economic Adviser Sanjeev Sanyal told BloombergQuint that the central government is willing to support more sectors that may have been hit by the second wave. He, however, said the economic impact is less severe this time than the first wave.

Sitharaman's announcement today could also be around bank privatisation. The government is considering two routes to privatise public-sector banks, either by ordinance or through an amendment, two people privy to the matter told BloombergQuint on the condition of anonymity. The finance minister, in her budget speech for 2021, had said the government would privatise two state-run banks. Names of these banks have not been disclosed yet.

This comes after PTI reported that a high-level panel, chaired by the cabinet secretary, had held a meeting on Sunday to discuss various regulatory and administrative issues around bank privatisation.

The announcement could also be around a stimulus package to promote health infrastructure and an increase in the credit guarantee limit, CNBC-TV18 has reported.

Track all live updates from the finance minister's press conference here...