In her last and fifth tranche of the Rs 20-lakh crore stimulus package, Finance Minister Nirmala Sitharaman continued with her focus on reforms, eased regulatory norms on insolvency and listing.
Briefing the media today, she made an additional allocation of Rs 40,000 crore towards the Mahatma Gandhi National Rural Employment Gurantee scheme (MGNREGS) with a view to providing jobs to the migrant workers who have shifted back to their native villages.
She also announced a new public sector policy, allowing involvement of private sector. “A new Aatmanirbhar Bharat will stand on a new Public Sector Enterprise Policy. In strategic sectors, at least one enterprise will remain in the public sector but private sector will also be allowed. In other sectors, PSEs will be privatized,” the Minister said.
Since the imposition of nationwide lockdown on March 25, Rs 16,394 crore has been paid to 8.19 crore farmers under the Rs 2,000 as dole.
The Centre has also acceded to states’ request to increase their borrowing limits from 3 per cent to 5 per cent, but this is only for 2020-21. However, this relaxation is contingent up specific reforms, including recommendations of Finance Commission: to ensure sustainability of the additional debt through higher future GSDP growth and lower deficits; promote welfare of migrants and reduce leakage in food distribution; increase job creation through investment; safeguard the interests of farmers while making the power sector sustainable; and promote urban development, health and sanitation.
In a series of announcements, Sitharaman laid down the roadmap for big bang reform measures, including opening up the coal sector to private players and increasing foreign direct investment (FDI) from 49 per cent to 74 per cent under the automatic route.
The minister has also announced a major booster dose for the micro small and medium enterprises (MSMEs) and agriculture sector. The government has also decided to amend the Essential Commodities Act and enact a Central law.
The government also announced steps for small businesses, street vendors, farmers and migrant laborers.
Prime Minister Narendra Modi earlier announced a Rs 20-lakh crore economic package accounting for about 10 per cent of the country’s GDP. This however included the earlier stimulus of Rs 1.7 lakh crore under the Pradhan Mantri Garib Kalyan Yojana and the Reserve Bank of India's Rs 5.6 lakh crore worth of liquidity measures.
''The health and economic crisis of such a magnitude required confidence building measures which would have boosted the sentiment to face up to the challenge. Getting back to economic activity and learning to live with the health emergency should enable the Indian economy bounce back fast,” Assocham secretary general Deepak Sood said.
Federation of Indian Export Organizations (FIEO) president Sharad Kumar Saraf said that though the overall stimulus package announced by the government has been encouraging and will help in the medium to long term, concerns over stimulating demand in the immediate future and tackling supply and supply chain disruptions remain.
(With agency inputs).