Hello and welcome to Quick Look. I am Siddharth Mathew.
This week saw Prime Minister Narendra Modi had announced the implementation of a Rs 20 lakh crore rupee Covid-19 package known as the ‘Atmanirbhar Bharat Abhiyan’to help India cope with the negative impacts of the Covid-19 outbreak on its economy.
This details of the package were announced in five tranches by Finance Minister Nirmala Sitharaman. It had 54 measures in total, of which 24 are related to liquidity support and expenditure from the Central exchequer while the balance 30 are policy reforms.
The first tranche of measures include Collateral free 4-year tenure loans for micro, small and medium enterprises (MSMEs) with moratorium on payment for first 12 months This loans would be worth three crore rupees. There is also a loan provision of 20,000 crore rupees for stressed MSMEs. A special liquidity scheme of 30,000 crore rupees for investment in debt papers of NBFCs was also announced, among other schemes.
The second tranche focussed on measures to help migrants and farmers.
The third tranche also included plans to invest 1.5 lakh crore rupees to build farm-gate infrastructure and support the logistics requirements for fishworkers, livestock farmers, vegetable growers, beekeepers and related activities. The Central Government will deregulate the sale of six types of agricultural produce, including cereals, edible oils, oilseeds, pulses, onions and potatoes, by amending the Essential Commodities Act, 1955.
The fourth tranche mentioned a hike in foreign investment limit in defence manufacturing and opened up space facilities while giving a new push to reforms in areas like commercial coal mining, mineral block auction and privatisation of power distribution.
The fifth tranche announced a hike in the allocation to the MGNREGA scheme by 40,000 crore rupees. It also announced an increase in the borrowing limit for States by an additional 4.28 lakh crore rupees for the financial year 2021. The Central Government has said there will be a maximum of four public sector units in strategic sectors, and state-owned firms in other segments will eventually be privatised. Finance Minister Nirmala Sitharaman also announced the suspension of new bankruptcy filings on loan defaults for one year and raised the threshold for insolvency under the Insolvency and Bankruptcy Code to 1 crore rupees from the current 1 lakh rupees. Will these measures help boost India’s economy? Tune in next week for more updates. Until then, Stay Safe, Stay Healthy.