Health, Tourism, Farming: FM’s 8 Relief Measures to Revive Economy

To improve India’s staggering economy left in the wake of the second wave of the pandemic, Union Finance Minister Nirmala Sitharaman announced a slew of economic relief measures on Monday, 28 June.

Out of the eight economic relief measures, four are absolutely new, Sitharaman said, and one is specific to health infrastructure. Eight other items related to growth, trade, and employment were also announced.

Prime Minister Narendra Modi said in a tweet, “The measures will help to stimulate economic activities, boost production and exports, and generate employment.”

Here are the new measures:

Loan Guarantee Scheme for COVID-Affected Sectors

• For COVID-affected areas, Rs 1.1 lakh crore credit guarantee scheme was announced, out of which Rs 50,000 crore will be for the health sector. The scheme is aimed at scaling medical infrastructure in cities other than eight metropolitan cities.

The guarantee coverage offered will be 50 percent for expansion and 75 percent for new projects.

Maximum loan provided will be Rs 100 crore and the guarantee duration will be up to three years. The interest rate will be at 7.95 percent. Rs 60,000 crore will be for other sectors and the interest rate will be at 8.25 percent.

Atmanirbhar Bharat Rozgar Yojana

Atmanirbhar Bharat Rozgar Yojana has now been extended from 30 June 2021, to 31 March 2022. Sitharaman said that over 21.4 lakh people of nearly 80,000 establishments have already benefited from the scheme.

• The scheme incentivises employers to create new employment through EPFO.

• Approved outlay at Rs 22,810 crore for 58.50 lakh estimated beneficiaries with monthly wages less than Rs 15,000.

Rs 23,220 Crore for Public Health

• Rs 23,220 crore for public health, with special focus on child and paediatric care earmarked for one year.

• It will also include HR augmentation to rope in medical students, nurses and for strengthening medical infrastructure. The said amount is to be spent in this financial year itself, the Finance Minister announced.

• Plans to increase ICU beds and oxygen supply at central, district and sub-district levels

Tourism

Once international travel resumes, first 5 lakh tourists who come to India will not have to pay visa fees. Scheme will be applicable till 31 March 2022, or will be closed after distribution of first 5 lakh visas. One tourist can avail benefit only once.

• To revive tourism, the new loan guarantee scheme will support 10,700 regional level tourist guides and Travel and Tourism stakeholders (TTS) recognised by the Ministry of Tourism and the State governments.

Loans will be provided with 100 percent guarantee, up to Rs 10 lakh for TTS per agency, and Rs 1 lakh for licensed tourist guides.

Pradhan Mantri Gareeb Kalyan Anna Yojana

The financial expenditure on the free distribution of ration to poor people this year will be Rs 93,869 crores. The total money spent on Pradhan Mantri Garib Kalyan Anna Yojana will be Rs 2,27,841 crores.

• 5 kg food grains will be freely provided to National Food Security Act (NFSA) beneficiaries from May to November 2021.

• The scheme was launched on 26 March 2020 for a period from April to June, and relaunched in May 2021.

Revival of NERAMAC to Enhance Agriculture in NE India

North Eastern Regional Agricultural Marketing Corporation (NERAMAC) will be revived to enhance agriculture, procurement, processing and marketing infrastructure in North East India.

• Revival package of Rs 77.45 crore proposed for financial restructuring in NERAMAC

• 75 farmer-producer organisations registered with NERAMAC and 12 GI crops of North East also registered.

• Plan to give 10 to 15 percent higher price to farmers by removing middlemen. Roadmap created for capacity building, marketing and technology.

Fertiliser subsidy

Additional subsidy for DAP and P&K fertilisers, as announced earlier:

• NBS subsidy increased to Rs 42,275 crore in FY 2021-22 from existing NBS subsidy of Rs 27,500 crore in FY 2020-21
• Additional amount of Rs 14,775 crore to be provided, including for DAP and NPK-based complex fertilisers.
• Record procurement seen of 432.48 lakh MT of wheat in Rabi marketing season (RMS)
• Rs 85,413 crore paid to farmers.

Farmers to get additional protein-based fertiliser subsidy of nearly Rs 15,000 crores.

Additional 1.5 Lakh CR Emergency Credit Line Guarantee Scheme

• The scheme was announced as part of the Atma Nirbhar Bharat Package in May, 2020.
• ECLGS - 1.0, 2.0, and 3.0 have resulted in credit dispersal of Rs 2.69 lakh crore out 3 lakh crore given to 1.1 crore units by 12 Public Sector Banks, 25 Private Sector Banks and 31 Non-banking Financial Companies.
• Finance Minister Nirmala Sitharaman said, “We are enlarging the scope of ECLGS by adding Rs 1.5 lakh crore under the emergency Credit line guarantee scheme.”
• Overall cap of admissible guarantee to be raised from Rs 3 lakh crore to Rs 4.5 lakh crore.

Credit Guarantee Scheme To Facilitate Loans to 25 Lakh Persons

• Guarantee will be provided to Scheduled Commercial Banks for loans to new or existing NBFC – MFIs or MFIs (Micro Finance Institutions) for lending up to Rs 1.25 lakh to approximately 25 small lakh borrowers.
• The interest rate on loans from banks will be capped at MCLR plus 2 percent.
• Maximum loan tenure will be three years, 80 percent of assistance to be used by MFIs for incremental lending, interest at least 2 percent below maximum rate prescribed by Reserve Bank of India (RBI).
• Guarantee cover for funding provided by MLIs to MFIs is till 31 March 2022 or till guarantees for an amount of Rs 7,500 crore are issued, whichever is earlier.

Other measures announced by Sitharaman:

• The government will be releasing climate-resilient crop varieties with special traits, as earlier focus was on developing higher yielding crops.

• Rs 33,000 crores additional boost for project exports through National Export Insurance Account (NEIA) over five years.

• Rs 88,000 crore to be infused through equity in Export Credit Guarantee Corporation (ECGC) over five years.

• Additional Rs 19,041 crore will be provided for BharatNet. Total outlay will be Rs 61,109 crore including already approved amount of Rs 42,068 crore in 2017.

• Plans to expand and upgrade cover of BharatNet to all Gram Panchayats and inhabited villages.

• Rs 3.03 lakh crore announced for reform-based, result-linked power distribution scheme. Centre’s share in the total allocation is around Rs 97,631 crore. 25 crore smart meters, 10,000 feeders, four lakh kilometre of LT overhead lines already planned.

Special Focus on Strengthening Healthcare Facilities for Children: Modi

After the relief measures were announced, Prime Minister Modi said, “Measures announced by FM today will enhance public health facilities, especially in under-served areas, boost private investment in medical infrastructure and augment critical human resources. Special focus is on strengthening healthcare facilities for our children.”

He added in another tweet, “Importance has been given to helping our farmers.”

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.

— Narendra Modi (@narendramodi) June 28, 2021

Modi added, “Several initiatives, including financial assistance are being taken to help those linked with tourism...Result linked Power Distribution Scheme and streamlined processes for PPP projects and Asset Monetisation demonstrates our Government’s continuing commitment to reforms.”