In 7 steps, FM raises MGNREGA budget, states' borrowing limit

Union Finance Minister Nirmala Sitharaman on Sunday (May 17) broke down the fifth and final tranche of the ₹20 lakh crore stimulus package into seven steps that included relief for labourers and businesses and reforms in the health and education sectors.

Sitharaman while addressing the press on the last day of Lockdown 3.0 said the steps will help people go back to normal life post COVID-19.

Among the major announcements was the ₹40,000 crore hike in the MGNREGA budget to ensure that labourers who are migrating back to their home states get work there.

As part of the government’s initiative to ramp up health infrastructure, Sitharaman said infectious diseases blocks will be built in all district hospitals. She also announced that public health labs will be set up at block level in every district, particularly in view of the lack of testing facilities in rural areas.

“We need to be ready for any pandemic at district or block level,” she said.

Besides, more investments will be made in clinics and wellness centres.

The minister said e-education will be encouraged as part of the Centre’s One Nation One Digital Platform plan. While one TV channel has been earmarked for each class, post lockdown, India will see an extensive use of community radio and podcast including special e-content for visually and hearing impaired students.

As part of Prime Minister Narendra Modi’s e-Vidya programme, the country’s top 100 universities will start online courses by May 30, 2020.

Related news | All you need to know: Fourth tranche of Centre’s stimulus package

To take the load off businesses that have been severely hit by the pandemic, the minister said debts due to COVID-19 shall not be included in default category under the Insolvency and Bankruptcy Code (IBC) and there will be no fresh insolvency proceedings up to one year.

In a boost for Micro, Small and Medium Enterprises (MSMEs), she announced that the minimum threshold to initiate insolvency proceedings have also been raised to ₹1 crore from ₹1 lakh. Also, a special insolvency framework will be notified under Section 240 A of the Insolvency and Bankruptcy Laws, for MSMEs

Sitharaman also announced decriminalisation of most sections of the Companies Act and opening of all sectors to private enterprises under the new Public Sector Enterprise policy.

Stating that states have seen a sharp decline in revenue due to COVID-19, Sitharaman said the Centre has decided to increase the borrowing limit for states from 3 per cent to 5 per cent of the GDP of 2020-21.

She said the state governments have only borrowed 14 per cent of the authorised limit so far.

The fourth tranche of the package, announced by Sitharaman on Saturday (May 16), focused on “structural reforms” in sectors such as defence production, airspace management, space sectors, atomic energy, coal and minerals among others.

The finance minister announced a hike in foreign direct investment (FDI) limit in defence manufacturing from 49 per cent to 74 per cent and opening of the space sector for private participation.

In her announcements over the past few days, Sitharaman has extended relief to MSMEs, migrant labourers as well as outlined steps to upgrade the farm-gate infrastructure.

Prime Minister Narendra Modi on Tuesday (May 12) announced the stimulus package, which is almost 10 per cent of the country’s GDP and said it has been designed to bring in reforms that will make India atmanirbhar (self-reliant).

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