FM announces Rs 6.28 lakh Crore COVID stimulus package

HIGHLIGHTS

• Rs 23,220 crore has been earmarked for healthcare infrastructure
• First five lakh tourist visas will be issued free of cost: Nirmala Sitharaman
• The Finance Ministry also announced a Rs 1.1 lakh crore loan guarantee scheme for Covid-affected sectors

Union Finance Minister Nirmala Sitharaman held a press conference on Monday to announce a Rs 6.28 lakh crore stimulus package. The package aims to boost Covid-affected sectors through eight measures proposed by the Ministry of Finance.

Four of the eight economic relief measures announced by Sitharaman are new, including one specific to health infrastructure.

Nirmala Sitharaman's 8 key announcements:

1. Expansion of healthcare infrastructure

• Sitharaman said apart from the credit guarantee scheme for the healthcare sector, an amount ofRs 23,220 crore has been earmarked for expansion of medical infrastructure for one year.
• This funding aims to increase the number of ICU beds and enhance the availability of equipment and liquid medical oxygen (LMO).
• Special emphasis will be laid on the preparedness of the healthcare infrastructure in terms of child and paediatric care.

2. Free visas, loan for travel agencies

• Once issuance resumes, thefirst five lakh tourist visas will be issued free of charge, said the Union Finance Minister. This incentive will cost the government around Rs 100 crore.
• Sitharaman also announced a loan guarantee scheme for the tourism sector, which has been one of the worst-hit by the coronavirus pandemic.
• The loan will be provided with100 per cent guarantee of up to Rs 10 lakh for travel agencies and Rs 1 lakh for regional tourist guides.
• As many as10,700 regional tourist guides will be eligible to avail this loan.

3. Rs 1.1 lakh crore loan guarantee scheme

• The Union Finance Minister announced aRs 1.1 lakh crore loan guarantee scheme for Covid-affected sectors. Out of the Rs 1.1 lakh crore, Rs 50,000 crore has been earmarked for the health sector.
• As many as25 lakh beneficiaries will be able to borrow up to Rs 1.25 lakh through micro-finance institutions (MFIs) under this scheme.
• Allocation of funds under this scheme will guarantee 75 per cent coverage for new projects and 60 per cent for expansion of existing projects at aninterest rate of 8.25 per cent.
• Referring to the loan guarantee cover, Sitharaman said that it will be for new projects related to healthcare in cities other than 8 metropolitan cities.
• Both public and private hospitals will be able to avail a maximum ofRs 100 crore with a guarantee duration of up to three years.

4. ECLGS cap raised by Rs 1.5 lakh crore

• The cap of the Emergency Credit Line Guarantee Scheme (ECLGS) has been raised toRs 4.5 lakh crore from the earlier Rs 3 lakh crore.
• Since the ECLGS was announced as part of Aatmanirbhar Bharat package last year, a total of Rs 2.69 lakh crore has been disbursed under this scheme to 1.1 crore units.

5. Rs 33,000 crore for NEIA

• A corpus announced by the Ministry of Finance will enable the National Export Insurance Account (NEIA) to underwrite an additionalRs 33,000 crore of project exports over five years.
• The NEIA, through EXIM Bank, facilitates cover for buyer's credit to project exporters and borrowers with less creditworthiness.
• On Monday, the Finance Ministry also proposedRs 88,000 crore to boost export insurance cover..

6. Extension of Aatmanirbhar Bharat Rozgar Yojana

• The Finance Ministry on Monday extended theAatmanirbhar Bharat Rozgar Yojana from June 30, 2021 till March 31, 2022.
• The wage subsidy scheme aims to incentivize employers via EPFO to create fresh employment and focuses on beneficiaries with monthly wages less than Rs 15,000.
• According to the ministry, the move could also lead to an increase in the salary packages of new employees. This will be done by reducing the cost borne by the company with the government stepping in to take care of statutory EPF dues.

7. PPP projects, DISCOMs, BharatNet

• A new process is being adopted to ensure speedy clearance of public-private partnership projects.
• The government has also allocatedRs 3.03 lakh crore to revamp DISCOMs (state-owned power companies). This stimulus, said Sitharaman, will enable DISCOMs to opt for ‘reform-based, result-linked' power distribution through upgradation of existing systems and enhanced capacity.
• An additionalRs 19,041 crore has been earmarked for BharatNet, which aims to improve broadband connectivity to villages across the country.
• The Finance Ministry has also extended the tenure of Production Linked Incentive Schemes (PLIs) for large scale electronic manufacturing.

8. Fertilizer subsidy, PMGKAY

• The Nutrient Based Subsidy (NBS) for fertilizers has been increased toRs 42,275 crore. An additional amount of Rs 14,775 crore will be provided to stakeholders, including for DAP (Di-ammonium Phosphate) and NPK-based complex fertilisers.
• Sitharaman also announced that the government will release 21 new varieties of climate-resilient crop varieties developed by the Indian Council of Agricultural Research (ICAR).
• The North Eastern Regional Agricultural Marketing Corporation (NERAMAC) will also be revived. A stimulus ofRs 77.45 crore has been earmarked for this purpose to enhance agriculture-related activities in the North East.
• In the press conference on Monday, Union Finance Minister Nirmala Sitharaman also announced the extension of the Pradhan Mantri Gareeb Kalyan Anna Yojana (PMGKAY) till November of this year.