FM Announces Relief Measures to Revive Economy

India’s Finance Minister Nirmala Sitharaman announced slew of measures to revive the Indian economy, which has been hit by the second wave of the COVID-19 pandemic.

Here are the key measures the finance minister (FM) announced today:

A guarantee scheme of Rs 1.1 lakh crore has been earmarked for pandemic-affected sectors. This includes Rs 50,000 lakh crore for the health care sector while the remaining amount would go to other sectors. The health care sector has a loan amount of Rs 100 crore and interest rate capped at 7.95% while other sectors have an interest rate capped at 8.25%.

The scope of ECLGS is expanded further, increasing the overall cap to Rs 4.5 lakh crore from Rs 3 lakh crore. So far, 1.1 crore units have been benefited with disbursals of 2.69 lakh crore loans.

The FM announced the credit guarantee scheme to disburse loans to small borrowers through MFIs. This will mainly focus on new loans and stressed borrowers, barring NPAs. Such borrowing is capped at Rs 1.25 lakh with an interest rate fixed at 2%.

Promoting the Digital India plan, the FM announced an additional outlay of Rs 19,041 crore for broadband to reach each village through the BharatNet PPP Model. The total outlay will be Rs 61,109 crore, including Rs 42,068 crore that was already approved in 2017.

The FM today extended the tenure of the PLI scheme for large-scale manufacturing of electronics by one year (up to 2025–26). This is because companies have been unable to achieve incremental sales due to disrupted production and constrained supply chains attributed to the second wave of the pandemic.

The FM announced an allocation of Rs 3.03 lakh crore for a revamped, reform-based, result-linked power distribution scheme. Of this amount, the center’s share would be Rs 97,631 crore. The scheme aims to provide financial assistance to DISCOMS to create infrastructure, upgrade systems, build capacities, and improve processes. The FM added that plans were underway to set up 25 crore smart meters, 10,000 feeders, and 4 lakh km of LT overhead lines.

Under the new loan guarantee scheme for pandemic-affected sectors, working capital/personal loans will be provided to those involved in the tourism sector to discharge liabilities and restart businesses impacted due to the pandemic. The scheme will cover 10,700 tourist guides registered at the regional level. Loans up to Rs 10,00,000 will be provided with 100% guarantee for TTS (per agency) and up to Rs 1,00,000 for tourist guides licensed at the regional or state level.

The FM announced a free tourist visa for the first five lakh tourists to apply for one. This will be applicable once visa issuance resumes.

The FM announced a boost of Rs 88,000 crore for export insurance cover. The Export Credit Guarantee Corporation (ECGC) promotes exports by providing credit insurance services.

Public health care works will receive another Rs 23,220 crore. This will finance new schemes focused on short-term emergency preparedness with a special emphasis on children and pediatric care/pediatric beds.

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FM Announces Relief Measures to Revive Economy
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