Finance Minister Ms. Nirmala Sitharaman presented, the 5th and final tranche on Sunday 17th May 2020, of the relief package promised by Hon. Prime Minister.
Over the last few days the Finance Minster, was busy spelling out the reforms, new initiatives and the measures to be undertaken by government immediately or as a policy reforms in near future to improve the business environment across all sectors and for people of India.
Further since the initial outbreak of corona pandemic in India, the government has come out with various steps to deal with the pandemic and at the same time provide some sort of relief across all sectors/ people of India.
Government has already released finds to states for Essential items, testing kits and medical kits, providing insurance cover for health professionals fighting corona, Arogya Setu App, Procurement of PPEs, amendment in Epidemic Diseases Act are some measures to fight corona.
Over and above that the Government has also gone all out to reform governance for ease of doing business.
Further announcement in todays’ speech are listed as below-
- MGNREGS-Mahatma Gandhi National Rural Employment Guarantee Scheme will get an additional outlay of 40K crores. This will help in providing additional 300 crore person days of work in total. A big help to home returning migrant labour and simplifying their life.
- Health reforms- Public expenditure will increase on health. Setting of infectious disease hospital blocks in each district. National platform for research under ICRM and implementation of National digital health blueprint.
- Technology driven education- PM e-VIDYA programme for digital/ online education will be launched immediately. One earmarked TV channel for each class from class 1 to 12, e-contents for visually and hearing impaired, top 100 universities to be permitted to start online courses by 30th May 2020.
- Further enhancement of Ease of doing business- Threshold limit raised to 1cr from 1lakhs for initiating insolvency proceedings. This will insulate MSMEs. Special insolvency resolution framework with new section 204A, suspension of new insolvency proceedings for next 1 year and to delete Covid-19 debt from list of default are further measures to help MSMEs.
- Decriminalisation of Companies- Minor offences and violations as regards to technical and procedural lapses will not be criminal anymore. Majority of compoundable offence to be separately dealt under internal adjudication mechanism.
- Ease of doing business for corporate- Some key reforms to help the Indian companies, open new avenues for them and help them grow.
- Direct listing for securities by Indian companies overseas.
- NCD listing on Stock exchanges by private company will not bring it under the scope of listed company.
- Lower penalties for small companies, one person company and producer companies and start ups.
- Public Sector Enterprise (PSE) policy– Open up economy to private sector except for some defined areas , which need to kept under the preview of PSE. Government will soon notify the strategic sectors under the PSE, which have presence of at least one PSE, but private sector will also be allowed to set up business in that sector. In other sectors PSEs will be soon privatised.
- Support to states– The central government has extended generous support to state Governments. Devolution of taxes in April (app. 46K crore) was fully given, advance release of SDRF ( approx. 11k crore), Revenue deficit grant to states (app 12.3K crores) direct release of funds from Health ministry to deal corona virus to tune of 1.2K crores and other means and measures announced by RBI to help states in form of increase in advances, number of days of continuous overdraft for a state increased from 14 to 21 days and the total number of days a state can be in overdraft during a quarter has been increased from 32 to 50 days. Borrowing limits of states have been increased from 3% to 5% of Gross State Domestic Product (GSDP).
- Supporting state for promoting state level reforms– The reforms announced by central government and to be managed and implemented by states in last few days include one nation one ration card, ease of doing business, power distribution and urban local body revenues. The Department of expenditure will further announce a scheme on the following pattern for the states-
- Unconditional increase of .5%
- 1% in 4 tranches of .25%, each linked to specific reform action.
- Further .5% if milestone is achieved in at least 3 of the 4 reform areas.
………….Summary of the relief package…………