Nirmala Sitharaman Press Conference: Finance Minister Announces Fifth Tranche Of Economic Measures 

Sitharaman, answering a query on the impact of the stimulus on the fiscal deficit, said the government is “making sure money goes to the right place. The government is not splurging, we are being responsible in spending.”

Sitharaman said the total measures and the steps announced by the Reserve Bank of India are worth Rs 20 lakh crore.

• Trance 1 to 5 measures: Rs 11,02,650 crore
• Earlier stimulus: Rs 1,92,800 crore
• RBI measures: Rs 8,01,603 crore
• Total: Rs 20,97,053 crore

The fourth and fifth set of measures are worth Rs 48,100 crore, the finance minister said.

• Viability Gap Funding: Rs 8,100 crore
• Additional MGNREGA allocation: Rs 40,000 crore

Sithraman said the third tranche of measures would cost Rs 1.5 lakh crore.

• Agri infrastructure fund: Rs 1,00,000 crore
• PM Matsya Sampada Yojana: Rs 20,000 crore
• Animal Husbandry Infra Development Fund: Rs 15,000 crore
• Food micro enterprises: Rs 10,000 crore
• Herbal cultivation: Rs 4,000 crore
• Operation Greens: Rs 500 crore
• Beekeeping: Rs 500 crore

The second set of measures were worth Rs 310,000 crore.

• Free food grain supply to migrant workers is Rs 3,500 crore
• Interest subvention for MUDRA, Shishu loans worth Rs 1,500 crore
• Special credit for street vendors is worth Rs 5000 crore
• Housing subsidy for mid-income category worth Rs 70,000 crore
• Additional emergency working capital through Nabard is Rs 30,000 crore
• Additional credit though Kisan Credit Card is Rs 2,00,000 crore

The measures for a self-reliant India announced in the first tranche were worth Rs 594,550 crore, the finance minister said. This included:

• Emergency working capital facilities for MSMEs involves Rs 3 lakh crore
• Subordinate debt for stressed MSMEs is Rs 20,000 crore
• Fund of Funds for MSMEs to be Rs 50,000 crore
• EPF support for business and workers is Rs 2,800 crore
• Reduction in EPF rates 6,750 crore
• Special liquidity for non-bank, housing finance and microfinance companies worth Rs 30,000 crore
• Partial credit guarantee scheme 2.0 for NBFCs is Rs 45,000 crore
• Liquidity injection for discoms is Rs 90,000 crore
• Reduction in TDS/TCS rates is Rs 50,000 crore

Even before Prime Minister Modi’s speech, the government had announced stimulus worth Rs 1.92 lakh crore, Sitharaman said giving break-up of Rs 20-lakh crore package. It included:

• Revenue lost due to tax concessions since March 22 worth Rs 7,800 crore
• PM Garib Kalyan Package was Rs 1.7 lakh crore
• PM’s announcement for health sector was Rs 15,000 crore

States’ borrowing limit increased to 5 percent from 3 percent of the state GDP for FY21, finance minister says. It’s aimed at allowing states to raise funds amid Covid-19 crisis. States will get extra resources of Rs 4.28 lakh crore, she said. This, however, is linked to meeting certain targets.

• 3 to 3.5 percent will be unconditional increase
• Another 1 percent will be released in four tranches of 0.25 percent with each linked to clearly specified, measurable and feasible reform activities
• Further 0.5 percent will be given as soon as milestones are achieved in at least three out of four reform areas

Finance Minister gave details of support extended to state governments during coronavirus pandemic.

• Rs 46,038 crore devolution of taxes to states in April
• Rs 12,390 crore revenue deficit grants to states for April and May
• Rs 11,092 crore advance release of SDRF in first week of April

All sectors will be opened to private companies while state-owned enterprises will play an important role in defined areas, the finance minister says.

• A new policy will specify strategic sectors requiring presence of state-run companies in public interest will be notified
• In the notified sectors, at least one public sector enterprise will be present but private sector will also be allowed
• In other sectors, state-run companies will be privatised. To minimise wasteful administration costs, a number of enterprises in strategic sectors will only be one to four, others will be privatised, merger of brought under holding companies

Violations of Companies Act involving minor technical and procedural defaults to be decriminalised, says Finance Minister.

• Shortcoming in CSR reporting
• Inadequacies in board report
• Filing defaults
• Delay in holding AGM

Majority of compoundable offences under Companies Act to be shifted to internal adjudication mechanism, says Sitharaman.

• Seven compoundable offences dropped altogether
• Five to be dealt with under alternative framework
• Provision of old Companies Act (Part IXA of 1956 Act) pertaining to producer companies being included in the new 2013 law

The finance minister announced a special insolvency resolution framework for MSMEs under IBC.

• Framework under Section 240A of IBC to be notified soon
• Ordinance to be issued for amending IBC, for timely change
• Changes to be ratified by Parliament later

Debt related to Covid-19 should be excluded from the category of default, the finance minister says.

• Empowering the centre to exclude Covid-related debt from definition of default under the Insolvency and Bankruptcy Code.
• Initiation of insolvency proceedings will remain suspended up to one year depending on the pandemic situation. This relief was earlier granted for six months.

The Ministry of Company Affairs will clarify on Covid-related debt definition, Sitharaman said later answering queries. The secretary, MCA will issue a notification with specific date where debt incurred to be treated as ‘Covid-period’, she said.

• The government will immediately launch a digital education programme, says Sitharaman. It will include:
• Use of existing DIKSHA portal for school education; online content and QR-coded textbooks
• One earmarked TV channel per class from I to XII
• Top 100 universities can automatically start online courses from May 30

The government will increase public expenditure on health, says finance minister.

• To ramp up health and wellness centres in rural and urban areas
• To have infectious diseases hospital blocks in all districts
• To build Integrated public health laboratories in all districts

The government will allocate an additional Rs 40,000 crore MGNREGA to provide work to migrants returning home, Sitharaman said. This will help generate 300 crore person days in total employment and is over and above the Rs 61,000 crore allocated in the budget.

There are seven focus areas in Sunday’s announcements, says Sitharaman.

• MGNREGA
• Heath and education
• Businesses
• Decriminalisation of Companies Act
• Ease of doing business and related matters
• Public sector enterprises
• State government and their resources

Giving details direct of cash transfers made during the lockdown, Sitharaman said.

• Rs 2,000 PM Kisan instalment transferred to 8.19 crore beneficiaries as of May 16
• Garib Kalyan transfers worth Rs 10,025 crore to 20 crore Jan Dhan accounts
• 2.2 crore building and construction workers given Rs 3,950 crore
• 6.81 crore free cylinders given to Ujjwala beneficiaries

Sitharaman said Sunday’s reforms will be the last set of measures after Prime Minister Narendra Modi’s announcement of an economic package to boost the economy. The reforms announced so far included land, labour, liquidity and laws.

Finance Minister Nirmala Sitharaman will today announce the fifth set of measures under to help the economy recover from the impact of Covid-19 crisis. Through the week, she unveiled four tranches of measures for various sectors. On Saturday, she focused on . On Wednesday, the measures were aimed at supporting small businesses, non-banking financial firms

Here are the top highlights so far:

• New Rs 1 lakh crore agriculture infrastructure fund to be established.
• A new scheme worth Rs 10,000 crore aimed at formalisation of micro food enterprises.
• Allocated Rs 20,000 crore for fishermen through the Pradhan Mantri Matsya Sampada Yojana which was announced in the Union Budget 2020.
• Another fund of Rs 15,000 crore for developing animal husbandry infrastructure has will be set up.
• Amendments will be brought to the Essential Commodities Act to deregulate foods like cereals, edible oils, oilseeds, pulses, onions and potatoes.
• Agriculture marketing reforms will be implemented through a new central law that will remove barriers to inter-state trade.
• Farmers will be given price and quality assurance through facilitative agriculture produce.
• The steps announced on Saturday focused on structural reforms for sectors including metals and mining, atomic energy, space, civil aviation and social infrastructure. Some of these were announced earlier as well.