Nirmala Sitharaman Unveils Second Tranche Of Covid-19 Package Aimed At Migrant Workers, Farmers
Here’s a look at the key highlights of the announcements made today.
Finance Minister Nirmala Sitharaman unveiled Thursday the second tranche of India’s Rs 20-lakh-crore Covid-19 relief package, with a focus on migrant workers, farmers and urban poor. Wednesday’s announcements focused on small businesses, non-bank lenders and the power sector.
Out of the Rs 20 lakh crore, measures worth 15.57 lakh crore have now been unveiled, including Rs 7.09 lakh in stimuli announced by the Reserve Bank of India and the finance ministry in the early days of India’s coronavirus lockdown.
Here are the key highlights of today’s announcements:
- Free food grain supply for two months for those migrants that are neither covered under National Food Security Act, 2013 or hold a state beneficiary card.
- Technology systems being put into place to enable usage of ration cards for procuring food at any fair price shop in India.
- Will launch a scheme for providing affordable rental housing accomodation for migrant labourers and urban poor.
- Interest subvention of 2 percent for 12 months on MUDRA-Shishu loans—that are below Rs 50,000.
- Special loans of up to Rs 10,000 to provide working capital for street vendors to restart business.
- Extending credit-linked subsidy scheme—that subsidizes interest rates on affordable home loans—for middle-income families till March 2021.
- Government will use CAMPA funds of Rs 6,000 crore to push employment.
- Additional Rs 30,000 crore to be provided for crop loans through NABARD.
- Concessional credit of up to Rs 2 lakh crore for Kisan Credit Card holders.
Read on for the details of the announcements made today:
Focus Of Today's Announcements
Finance Minister Nirmala Sitharaman said that today's announcements will focus on migrant workers, street vendors, small traders, small farmers and self-employed people.
Interest Subvention Scheme For Farmers Extended
The interest subvention and prompt repayment incentive on crop loans due from March 1 has now been extended up to May 31, 2020.
Finance Minister Lists Support For Farmers In March And April
- 63 lakh loans of Rs 86,600 crore approved in agriculture
- NABARD refinancing of Rs 29,500 crore
- Rural Infra Development Fund support of Rs 4,200 crore to states
- Rs 6,700 crore sanctioned to state government entities to procure agri produce
FM Lists Measures Already Taken For Urban Poor And Migrants
- Government permitted state governments to utilise State Disaster Response Fund for setting shelter for migrants and providing them food and water.
- Centre released over Rs 11,000 crore of its contribution in advance to all states.
- Three meals per day provided at the cost of central government for residents of Shelters for Urban Homeless during the lockdown.
MGNREGA Support To Returning Migrants
The finance minister said that 14.62 crore person-days of work have been generated till May 13, 2020 at an expenditure of about Rs 10,000 crore.
Work has been offered to 2.33 crore wage seekers in 1.87 lakh gram panchayats. Over 40-50 percent more people have been enrolled in May, compared to last year.
This is to ensure that the migrant workers that are returning back to home states are not out of work there.
Work during monsoon will also be actively taken up, Sitharaman said.
Free Food Grain Supply To Migrants For 2 Months
The finance minister has announced that migrants in various states will get free food grains.
About 8 crore migrants are expected to benefit. The government will spend up to Rs 3,500 crore for this intervention.
This will include migrants who are neither covered under the National Food Security Act, 2013 or hold a state beneficiary card.
Such persons will be provided 5 kilograms of grains per person and 1 kilogram of chana (chickpeas) per family per month for two months.
The state governments will be responsible for the implementation and distribution.
Enabling Migrants To Use Ration Card For Food Anywhere In India
The finance minister said that technology systems will be used to enable migrants to access the public distribution system for buying ration at any fair price shop in India.
The move has been introduced as a lot of migrants, who were moving back to their home states, were not able to access food there.
67 crore citizens in 23 states, or 83 percent of the PDS population, will benefit from the move by August 2020, according to the finance minister. 100 percent national portability will be achieved by March 2021, Sitharaman said.
Affordable Rental Accomodation For Urban Poor
The finance minister said that the government will launch a scheme for affordable rental housing complexes under the Prime Minister's Awas Yojana for migrant labour and urban poor.
This will be done by converting government-funded housing in cities to such rental complexes through a public-private partnership.
The government will incentivise manufacturing units, industries and institutions to develop and operate such affordable complexes on their private land. The Centre will also incentivise state government agencies similarly.
The ministry will issue detailed guidelines shortly.
Interest Subvention For MUDRA-Shishu Loans
The finance minister announced that prompt payees under the MUDRA-Shishu loan scheme will be given an interest subvention of 2 percent for a period of 12 months.
This, coupled with the RBI’s loan moratorium, will give them a relief of up to Rs 1,500 crore, Sitharaman said.
The current portfolio of MUDRA-Shishu loans is around Rs 1.62 lakh crore. The Shishu category involves loans of Rs 50,000 and less.
Special Credit Facility For Street Vendors
The government will launch a special scheme within a month to facilitate easy access to credit for street vendors.
The facility will provide an initial working capital of up to Rs 10,000 to restart their businesses which have been adversely impacted by the Covid-19 lockdown.
This is expected to support 50 lakh street vendors and will provide liquidity of up to Rs 5,000 crore, the finance minister said.
Digital payments will also be incentivised through monetary rewards and enhanced credit will be given for prompt repayments.
Extension Of Credit Linked Subsidy Scheme On Home Loans
The credit linked subsidy scheme for those earning between Rs 6-18 lakh annually has now been extended up to March 2021 from March 2020 earlier.
The scheme provides a subsidy to middle-income earners on affordable home loan interest rates.
Almost 3.3 lakh families have benefitted from this and the extension will benefit another 2.5 lakh middle income families.
This will lead to an investment of over Rs 70,000 crore in housing, Sitharaman said.
Government To Use CAMPA Funds For Employment Push
The finance minister said that the Rs 6,000 crore lying in the Compensatory Afforestation Fund will be used to push employment opportunities in urban, semi-urban and rural areas.
This will help create job opportunities for tribals and adivasis, Sitharaman said.
Rs 30,000 Crore Additional Emergency Capital For Farmers
The finance minister said that the government give Rs 30,000 crore as additional emergency working capital for farmers through the National Bank for Agriculture and Rural Development.
The NABARD already provides up to Rs 90,000 crore annually as working capital to farmer. Now the central government will infuse another Rs 30,000 crore towards the same.
NABARD will extend the refinance support for crop loan requirements of rural cooperative banks and regional rural banks.
The additional funds will be released immediately, finance minister said. This will help up to 3 crore small and marginal farmers.
Concession Credit Of Up To Rs 2 Lakh Crore For Kisan Credit Card Holders
The finance minister announced that a special drive will be undertaken to provide concessional credit to PM-KISAN beneficiaries through Kisan Credit Cards.
Up to 2.5 crore farmers will be covered and will benefit from credit flow of about Rs 2 lakh crore. This will also include those involved in animal husbandry and fisheries.