Finance minister Nirmala Sitharaman on Monday announced a slew of relief measures to help bring the economy back on its feet after the unannounced second wave of the pandemic caused rampant distress. The measures included ramping up of healthcare infrastructure, providing credit guarantee scheme and focusing of job creation, among other things.
“While the measures are welcome and target Covid sensitive sectors , most of the fiscal support is still below the line and in the form of loan guarantees, and not direct stimulus. Overall, Amid various push and pull, there is a likelihood of fiscal slippage to the tune of around 0.5% from the initially budgeted 6.8%. Despite the slippage, the effective fiscal impulse will still be negative in FY22. Given the limited efficacy of monetary easing currently, continued countercyclical fiscal policy support—and avoiding a premature consolidation—remains crucial," said Madhavi Arora, lead economist, Emkay Global Financial Services said,
Here is a list of 8 major announcements by the finance minister Nirmala Sitharaman:
- Finance Minister Sitharaman announced Rs 50,000 crore in the health sector for scaling up medical infrastructure. Additionally, the Finance Minister also announced Rs 23,220 crore for public health - the scheme is focused on short term emergency preparedness with emphasis on children, pediatric care.
- Finance Minister announced Rs 1.5 lakh crore guarantee scheme emergency credit line guarantee scheme. Finance Minister announced Rs 1.1 lakh crore guarantee scheme for COVID-19 affected sectors as well. The overall cap of Emergency credit line guarantee scheme has also been raised from Rs 3 lakh crore to Rs 4.5 lakh crore.
- Pradhan Mantri Gareeb Kalyan Yojana was extended from June 30, 2021 to March 31, 2022. With this, the total cost of the Pradhan Mantri Gareeb Kalyan Yojana now stands at Rs 2,27,841 crore. The scheme entails to providing free food grains to the vulnerable sections amid the pandemic.
- Revival package of Rs 77.45 crore was announced for financial restructuring and infusion of funds was announced on Monday. It proposes to set up Northeastern Centre for organic cultivation, facilitating equity finance for entrepreneurs.
- Existing NBS subsidy has been increased to Rs 42,275 crore in current financial year. The additional amount is Rs 14,7555 crore, announced the Finance Minister.
- Once visa issuance is restarted, first 5 lakh tourists visas will be issued free of charge, announced the Finance Minister. Finance Minister announced that the financial support will cover more than 11,000 tourist guides, travel, tourism stakeholders. Loans will be provided under 100 per cent guarantee, under few limits.
- Rs 60,000 crore relief was announced for other sectors. The interest rate is capped at 8.25 per annum.
- Finance Minister Nirmala Sitharaman announced a credit guarantee scheme to facilitate loans to 25 lakh borrowers under micro finance institutions (MFIs). Guarantee will be provided to scheduled commercial banks for loans to new or existing NBFCs or MFIs for lending upto Rs 1.25 lakh.