Health, credit, jobs: FM announces 8 measures to revive economy in pandemic

Nirmala Sitharaman unveils more support measures for the economy, including a 50% expansion in its emergency credit program.

Finance Minister Nirmala Sitharaman, on Monday, announced a slew of relief measures for several sectors including health infrastructure. 

She announced eight such measures, out of which she said four were new initiatives. Below are the key points. 

Loan guarantee scheme for Covid-affected sectors

The measures announced included a 1.1 trillion loan guarantee scheme for Covid affected sectors. Of this amount, Rs 50,000 crore has been allocated to the health sector, with a focus on the amelioration of health infrastructure outside the eight metropolitan cities, particularly in tier 2 and 3 cities and aspirational districts. 

The scheme would help existing projects with 50 per cent of the required amount for expansion, while new projects can avail 75 per cent of the required funds through the loan scheme. In aspirational districts, both new and existing projects will be eligible for 75 per cent coverage. The maximum loan disbursed through the scheme will be capped at Rs 100 crore or $13.47 million and the guarantee will extend for 3 years. The interest rate for the loan scheme will be capped at 7.95 per cent per annum (p.a.). 

The remaining amount of Rs 60,000 crore in the scheme will be disbursed to other sectors at an interest rate of 8.25 per cent p.a..

Scope of ECLGS enlarged, more details awaited

Besides this, the FM announced more schemes aimed at alleviating the fiscal stress in various industries amid the Covid-19 pandemic. The Ministry has enlarged the scope of the Emergency Credit Line Guarantee Scheme (ECLGS), first launched as part of the Atmanirbhar Bharat Package in May last year. The overall cap of admissible guarantee will be raised from Rs 3 lakh crore to Rs 4.5 lakh crore, with sector-wise details to be finalised as per evolving needs. 

Sitharaman said that ECLGS, to date, has seen Rs 2.69 trillion in credit disbursal 1.1 crore units through public sector banks, private sector banks and non-banking financial companies. 

New credit guarantee scheme

The Ministry also announced the Credit Guarantee Scheme to facilitate loans to 25 lakh persons, most of whom will be small borrowers, through scheduled commercial banks and micro-financial institutions. The amount per loan will be capped at Rs 1.25 lakh or $1,685 with an interest rate of MCLR (the minimum lending rate for a bank) plus 2 per cent. 

Working capital loans for tourist guides, free tourist visas

The new initiatives included a scheme for reviving tourism in the country by providing financial support to 11,000 registered tourist guides and other industry stakeholders. The financial support will be through working capital/personal loans and will cover 10,700 regional level tourist guides empanelled with the Ministry of Tourism or with any state government. The loans will be provided with a 100 per cent guarantee, with the amount capped at $1 million per travel and tourism agency and Rs 100,000 for tourist guides. 

With an aim to boost tourism, the FM said that when India resumes issuing tourist visas, the first 500,000 tourist visas will be issued for free. The benefit will be applicable only once per tourist and will be applicable till March 31, 2022, or till the first 500,000 visas are issued, whichever is earlier. 

Job scheme extended 

The scheme was launched to incentivise job creation and restoration has now been extended from June 30, 2021, to March 31, 2022. More than 21.4 lakh people of nearly 80,000 establishments have already benefited from the scheme. The scheme incentivises employers for the creation of new employment and restoration of loss of employment through EPFO. The Ministry has claimed as of this month, benefits worth Rs 902 crore had been given to 21.42 lakh beneficiaries of 79,577 establishments. 

Additional subsidy for fertilisers

Reiterating a scheme that had been announced earlier, the FM reiterated that the existing Nutrient Bases Subsidy (NBS) was worth Rs 27,500 crore in FY21, which has now been increased to Rs 42,275 crore in FY22. Of the additional Rs 14,775 crore to be provided, Rs 9,125 crore additional subsidy for DAP fertilisers and Rs 5,650 crore additional subsidy for NPK based complex fertiliser. The FM noted that the Rabi Marketing Season of the ongoing fiscal year had seen a record wheat procurement of 432.48 lakh MT against 389.92 lakh MT in the previous year. 

Extension of Pradhan Mantri Garib Kalyan Yojana

An announcement previously made by Prime Minister Narendra Modi, the FM reiterated that the scheme, earlier into plan till November 2020, was relaunched in May this year to ensure food security of the poor and vulnerable sections of the society amid the second wave of the pandemic. As per the scheme, 5 kg of foodgrains are provided for free to beneficiaries of the National Food Security Act (NFSA). In FY21, the total cost of the scheme for the Centre was Rs 133,972 crore. This year, estimated financial implications of the scheme’s extension are worth Rs 93,869 crore. 

Public health focused on paediatric care

The Ministry has made an additional outlay of Rs 23,220 crore for public health, which includes a new scheme focused on short term emergency preparedness with special emphasis on children and paediatric care/beds. 

The funds, meant for use over one year, will be utilised for increasing staff strength, including doctors, nurses and interns, in hospitals and Covid care centres; increasing the availability of ICU beds and oxygen supply at central, district and sub-district levels; ensuring the availability of essential medical equipment, medicines, teleconsultation and ambulance services; and, enhancing the Covid testing capacity and supportive diagnostics. 

Apart from the measures mentioned above, several other measures for enhancing broadband connectivity and the proposed revival of the North Eastern Regional Agriculture Marketing Corporation (NERAMAC) were also announced.