Finance Minister Nirmala Sitharaman addressed a press conference on Monday, June 28, where she announced some economic relief measures with a special focus on health and tourism. These measures come at a time when the economy has suffered as a result of lockdowns imposed due to the second wave of coronavirus. Various sectors had urged the government to announce stimulus packages to support the struggling economy. The significant economic relief measure announcements include:
Financial Support For COVID-Affected Sectors
Sitharaman announced ₹ 1.1 lakh crore guarantee scheme for COVID affected sectors. Out of the ₹ 1.1 lakh crore package, the healthcare sector will get ₹ 50,000 crore, and other sectors will receive ₹ 60,000 crore, as reported by NDTV. Further, a maximum loan amount of ₹ 100 crore has been allotted for the healthcare sector, with the interest rate capped at 7.95%. For other sectors, the interest rate is capped at 8.25%.
Scope Of ECLGS Enlarged
Last year, the Centre had announced an Emergency Credit Line Guarantee Scheme (ECLGS) under the Atmanirbhar Bharat package to provide financial support and collateral-free loans to the micro, small and medium enterprises (MSME) affected by the first wave of the Covid pandemic. This time, the ECLGS Limit has been increased from ₹ 3 lakh crore to ₹ 4.5 lakh crore.
New Credit Guarantee Schemes Announced
The new Credit Guarantee Scheme was launched to facilitate loans to small borrowers via microfinance institutions (MFIs). This scheme will provide a maximum individual loan of Rs 1.25 lakh, with an interest rate 2% less than the RBI prescribed rate, to 25 lakh people. The duration of the loans will be three years. The focus will be on new loans, according to the Finance Minister.
New Scheme To Revive Tourism
Sitharaman announced a loan guarantee support for Travel & Tourism Stakeholders (TTS). Besides that, a loan of up to ₹ 10 lakh will be provided to a travel and tourism agency at a 100% guarantee, and a licensed tourist guide can get up to ₹ 1 lakh loan at a 100 per cent guarantee. The first 5 lakh tourists will be provided with free visas once the visa issuance restarts. The scheme will be applicable till 31 March 2022.
Extension Of Aatma Nirbhar Bharat Rozgar Yojana
The Finance Minister also announced the extension of the Aatma Nirbhar Bharat Rozgar Yojana from June 30, 2021, to March 31, 2022. According to the Ministry of Finance, more than 21.4 lakh people of around 80,000 establishments have benefited from the scheme.
Free Food Grains Under Pradhan Mantri Garib Kalyan Anna Yojana
Sitharaman announced free food grains to the poor from May to November 2021, under Pradhan Mantri Garib Kalyan Anna Yojana. The total cost of PMGKAY so far has been ₹ 2,27,841 crore. The scheme aims at providing free food grains to the vulnerable section of society.
Besides these schemes, farmers will be provided with an additional protein-based fertilizer subsidy of around ₹15,000 crore. North-Eastern Agricultural Marketing Corporation will get ₹ 77.45 crore of Revival package for financial restructuring and give a higher price to farmers by bypassing middlemen.
The economic measures come at the backdrop of RBI's estimate of ₹ 2 lakh crore loss during the financial year 2020-21, as noted by RBI's monthly bulletin for June 2021. It also estimated an economic contraction of 7.3 per cent in the current financial year.