President Ram Nath Kovind addresses a joint session of Parliament in the presence of Vice President Venkaiah Naidu and Lok Sabha Speaker Om Birla. (Source: PTI)

Modi Government Planning Collateral-Free Loans Up To Rs 50 Lakh For Entrepreneurs, Says President Kovind

The Narendra Modi government, in its second term, will implement more economic reforms—including collateral-free loans to entrepereneurs—to boost growth in the Indian economy, President Ram Nath Kovind said in his Parliament speech Thursday.

While the Pradhan Mantri Mudra Yojana is being extended to cover 30 crore individuals, a facility for entrepreneurs to avail loan of up to Rs 50 lakh without any guarantee will be introduced, the president said in his customary speech after formation of the 17th Lok Sabha.

Also, the credit guarantee coverage for the small and medium enterprises sector is being enhanced to Rs 1 lakh crore. “Apart from this, new employment opportunities will be generated through appropriate policies in sectors which have the potential to accelerate the economy.”

A new industrial policy to make India a manufacturing hub and a simpler Goods and Services Tax regime is in the works as well. These reforms that will propel into the Top 50 of World Bank’s Ease of Doing Business rankings, Kovind said. India, he said, has leapfrogged 65 positions on the rankings—to 77 in 2018 from 142 in 2014.

“Now, our goal is to be among the Top 50 countries of the world. To achieve this, the process of simplification of rules will be further expedited in collaboration with the states. In this sequence, necessary amendments are also being brought in the companies law,” said Kovind.

A National Retail Trade Policy is also on the anvil, he added.

“Today, India is among the fastest growing economies in the world. Inflation is low, fiscal deficit is under control, foreign exchange reserves are growing and the impact of Make In India is clearly visible,” said the President.

India, he said, is on the way to become the world’s fifth-largest economy in terms of gross domestic product. “To maintain a high GDP growth rate, the reform process will continue. It is our objective to make India a $5 trillion economy by 2024,” he said.

While Finance Minister Nirmala Sitharaman will present the first budget of Modi 2.0 on July 5, Kovind’s speech laid out priority areas for the government.

Taking reforms forward to push GDP growth, which has slipped to 5-year low of 6.8 percent in 2018-19, is the top priority. With a forecast of below-normal rainfall in many parts of India, addressing agrarian distress is also on the agenda—as is job creation.

“Only on the foundation of a strong rural economy is it possible to build a strong national economy,” Kovind said. “Our farmers are the pillars of the rural economy. All possible efforts are being made by the central government to provide adequate assistance to states for agricultural development.”

“In order to enhance agriculture productivity, an investment of Rs 25 lakh crore will be made in the coming years,” he added.

The government has decided to extend to all farmers the PM-KISAN scheme, which gives Rs 6,000 annually to all agricultural workers. The Pradhan Mantri Kisan Samman Nidhi scheme will now cost Rs 90,000 crore to the exchequer, as against Rs 75,000 crore earlier.

A pension scheme for farmers has also been approved, while Rs 13,000 crore has been allocated to a new scheme for treatment of livestock. The government is also targeting setting up of 10,000 new farmer cooperatives to boost farm income.

For traders, who traditionally have supported the Bharatiya Janata Paty, a pension scheme for three crore small shopkeepers and retail traders has been approved.

“National Traders Welfare Board will be constituted shortly, and National Retail Trade Policy will be formulated to promote retail business. Accident insurance of up to Rs 10 lakh will also be provided to all traders registered under GST,” said Kovind.

On taxation, Kovind said simplification of India’s taxation system is in focus.

“Indirect tax system is also being made simple and effective. With the implementation of GST, the concept of 'one country, one tax, one market' has become a reality. Efforts to further simplify the GST will continue,” he said.

After the success of the Pradhan Mantri Jan Dhan Yojana, the government is now working to bring banking services to the doorsteps of the people, said Kovind.

“About 1.5 lakh post offices in the country are being prepared to provide banking services through India Post Payment Bank,” he said.

The President said Direct Benefit Transfer has helped save Rs 1.41 lakh crore of subsidy going to unintended beneficiaries. “It has also enabled deletion of names of about 8 crore ineligible beneficiaries,” he said. “DBT will be further expanded in the coming days. I would urge the state governments to use DBT in more and more schemes.”

The government has something for startups as well, as its simplifying the process for setting up a new company. “This campaign will be further expedited. Our goal is to establish 50,000 startups in the country by 2024.”

To boost infrastructure, 35,000 km of national highways will be constructed by 2022, while a network of good-quality roads is being laid in coastal areas to join ports, the President said.

Bloomberg Quint

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