- Friday, May 03, 2024
By: Shubham Ghosh
FINANCE minister Nirmala Sitharaman on Monday (28) announced a stimulus package of Rs 6.29 lakh crore ($85 billion) to revive the economy plagued by the second wave of Covid-19 pandemic. Under the package, a credit guarantee scheme of Rs 1.1 lakh crore (around $15 billion) was allotted to sectors that have been hit by the Covid-19 pandemic. The government earmarked Rs 50,000 crore ($6.7 billion) out of this for relief for the health sector, which has come under massive pressure in times of the pandemic and Rs 60,000 crore ($8 billion) for other sectors with interest rate capped at 8.25 per cent.
Addressing a press conference in New Delhi, Sitharaman said as many 25 lakh (2.5 million) people will benefit from the credit guarantee scheme. “Loans will be given to the smallest borrowers by micro-finance institutions. A maximum of Rs 1.25 lakh ($1,684) will be lent. The focus is on new lending and not on repayment of old loans,” she told the media.
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Sitharaman also said that the interest rate on the new credit guarantee scheme is two per cent less than the rate prescribed by the Reserve Bank of India, with a loan duration of three years. She said the focus will be on fresh loans and stressed borrowers with the exception of NPAs – non-performing assets. The minister added that the new credit guarantee scheme will benefit the “smallest of the small borrowers” in the hinterland, including those in small towns.
Besides the loan guarantee scheme, the government has also allocated Rs 23,220 crore ($3.1 billion) for expanding the infrastructure for healthcare, with a specific focus on child and paediatric care.
Sitharaman’s other announcements
Among other announcements that Sitharaman made under the revival plan are: retail loan of Rs 10 lakh ($1,3471) for travel agencies and Rs 1 lakh ($1,347) for tour guides; free visas for first five lakh (0.5 million) tourists; raising the overall cap of the Emergency Credit Line Guarantee Scheme to Rs 4.5 lakh crore (around $60.6 billion) from the earlier Rs 3 lakh crore (around $40.4 billion); allocation of Rs 19,041 crore ($2.5 billion) for expansion of the reach of broadband to every village across India; Rs 77.45 crore ($10.4 million) to revive the North Eastern Regional Agriculture Marketing Corporation; extension of production-linked incentive scheme for large-scale electronics manufacturing for another year; etc.
The Centre also extended the Atmanirbhar Bharat Rozgar Yojana scheme to boost employment till March 31, 2022, from June 30, 2021, earlier. The scheme, which was launched last October, encourages employers to create new employment and restore loss of employment through employer’s provident fund organisation. Under the scheme, benefit of Rs 902 crore ($121 million) has been provided to more than 21 lakh (2.1 million) beneficiaries of 79,577 establishments till June 18 this year.
Modi hails scheme
Prime minister Narendra Modi hailed the scheme on Twitter saying it will help in improving public health facilities, particularly in the under-served areas and boosting private investment in medical infrastructure and critical human resources. He also appreciated that a special focus was given on strengthening healthcare facilities for the country’s children.
He also said: “Further support has been announced for our small entrepreneurs & self-employed persons,to enable them to sustain their business activities but & expand them further. Several initiatives, including financial assistance are being taken to help those linked with tourism.”
In another tweet, he said: “The measures will help to stimulate economic activities, boost production & exports and generate employment. Result linked Power Distribution Scheme and streamlined processes for PPP projects and Asset Monetisation demonstrates our Government’s continuing commitment to reforms.”
