New stimulus package to blunt impact of 2nd wave

Strap: Rs1.1 L cr loan guarantee scheme for Covid-hit sectors

BOX

FM announces recovery measures

* ECLGS scheme limit raised by Rs1.5 lakh cr to Rs4.5 lakh cr

*Free visas to 5 lakh tourists, financial support for tourism sector

*New policy on anvil to fast-track clearances for PPP proposals

*Govt to infuse equity in ECGC to boost export insurance cover

* Additional Rs 23,220 cr funding for paediatric facilities in hospitals

*Rs 93,869 cr allocated this year for free foodgrains scheme

* Rs 19,000 cr more for BharatNet project aimed at broadband connectivity in rural India

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Tribune News Service

New Delhi, June 28

Union Finance Minister Nirmala Sitharaman on Monday announced eight measures, six of them new, pertaining to growth, exports, health and employees aimed at ameliorating the distress caused by the second wave of the Covid pandemic as well as to gear up to counter a possible third wave.

The government estimates the package to amount to Rs 6.29 lakh crore, but it also includes earlier announced schemes such as the extension of the free foodgrain scheme, which alone will cost the exchequer over Rs 93,000 crore.

Asked about the actual cash outflow, Sitharaman said: “We will come back with greater details. We have clearly given out what this implies in terms of financials. When it reaches the ground, it makes a difference.”

Addressing a press conference, Sitharaman announced a Rs 1.1-lakh crore loan guarantee scheme for Covid-affected sectors, including Rs 50,000 crore for the health sector.

She announced the enlargement of the Emergency Credit Line Guarantee Scheme (ECLGS) given as part of Aatmanirbhar Bharat Package by Rs 1.5 lakh crore from the present corpus of Rs 3 lakh crore.

A new credit guarantee scheme has been launched to give loans to small borrowers, through micro finance institutions (MFIs), where the maximum loan to individuals will be Rs 1.25 lakh at an interest rate 2 per cent below the rate prescribed by the RBI.

For the tourism sector, financial support will be extended to more than 11,000 registered tourist guides and travel and tourism stakeholders (TTS). These TTS will receive up to Rs 10 lakh loan, while licensed tourist guides will get up to Rs 1 lakh loan.

Besides, the government will give 5 lakh free visas to boost tourism. These will be for short-term stays up to one month and given once to each foreigner.

The Finance Minister also announced an additional Rs 23,220 crore for short-term emergency preparedness with an emphasis on pediatric care. This is on top of Rs 15,000 crore provided in the budget.

Extra corpus will be provided to the National Export Insurance Account to underwrite Rs 33,000 crore worth of project exports over five years. For exports, the Finance Minister announced a proposal to infuse equity in Export Credit Guarantee Corpn over 5 years to boost export insurance cover by Rs 88,000 crore.

An additional Rs 19,041 crore outlay will be provided for providing broadband to each village through BharatNet PPP model.

Sitharaman also announced an allocation of Rs 3.03 lakh crore for a revamped reform-based result-linked power distribution scheme. Of this, the Centre’s share would be Rs 97,631 crore.

A new streamlined process for Public-private partnership (PPP) projects and asset monetisation will aid speedy clearance of projects while the productivity-linked incentive (PLI) scheme for large-scale electronics manufacturing has been extended by one year, till fiscal 2025-26. Under the scheme, the manufacturers are given incentives of 4% to 6% on incremental sales of goods under target segments manufactured in India.

The total cost of Pradhan Mantri Garib Kalyan Anna Yojana (PMGKAY) in 2020-21 was Rs 1,33,972 lakh crore. The total estimated fiscal impact of the scheme is seen at 93,869 crore. The distribution of foodgrains free of cost began in March 2020, and was subsequently extended till November 2021.