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Nirmala Sitharaman announces last tranche of Rs. 20 Lakh crore ‘Atma Nirbhar Bharat’ economic package

Union Finance Minister Nirmala Sitharaman on Sunday announced the fifth and final tranche announcement under government’s Rs. 20 lakh crore ‘Atma Nirbhar Bharat’ economic package to help various sectors of the economy battered by the Covid-19 pandemic. The comprehensive package, which is equivalent to 10 per cent India’s GDP, was announced by Prime Minister Narendra Modi on Tuesday.

Sitharaman has been holding daily press conferences sharing the details of the economic package since Wednesday.

Addressing a press conference in New Delhi today, the finance minister listed seven steps of economic measures including for MNREGA, health and education related sector, businesses and COVID-19, decriminalisation of Companies Act, Ease of Doing Business, Public Sector Enterprises- related steps, state governments and related resources.

Here are the key highlights of today’s announcement : 

Rs 40,000 crores additional allocation for MGNREGS under MGNREGS to provide employment boost

• Will help generate nearly 300 crore person days in total
• Address need for more work including returning migrant workers in Monsoon season as well
• Creation of larger number of durable and livelihood assets including water conservation assets
• Will boost the rural economy through higher production.

Health Reforms & Initiatives

• Public Expenditure on Health will be increased.
• Investments In grass root health institutions
• Ramp up Health and Wellness Centres in rural and urban areas

Preparing India for any future pandemics –
• Infectious Diseases HospitalBlocks – all districts
• Strengthening of lab network and surveillance –

o Integrated Public Health Labs in all districts & block level
Labs & Public Health Unit to manage pandemics.
• Encouraging Research–National Institutional Platform for One health by ICMR
• National Digital Health Mission: Implementation of National Digital Health Blueprint

Technology Driven Education with Equity post-COVID

PM eVIDYA- A programme for multi-mode access to digital/online education to be launched immediately; consisting of:

• DIKSHA for school education in states/UTs: e-content and QR coded Energized Textbooks for all grades (one nation, one digital platform)
• One earmarked TV channel per class from 1 to 12 (one class, one channel)
• Extensive use of Radio, Community radio and Podcasts
• Special e-content for visually and hearing impaired.
• Top 100 universities will be permitted to automatically start online courses by 30th May, 2020.
• Manodarpan- An initiative for psychosocial support of students, teachers and families for mental health and emotional wellbeing to be launched immediately.
• New National Curriculum and Pedagogical framework for school, early childhood and teachers will be launched: integrated with global and 21st century skill requirements
• National Foundational Literacy and Numeracy Mission for ensuring that every child attains Learning levels and outcomes in grade 5 by 2025 will be launched by December 2020

Business and COVID-19

A. Ease of Doing business through IBC related measures

• Minimum threshold to initiate insolvency proceedings raised to Rs. 1 crore (from Rs. 1 lakh, which largely insulates MSMEs).
• Special insolvency resolution framework for MSMEs under Section 240A of the Code to be notified soon.
• Suspension of fresh initiation of insolvency proceedings up to one year depending upon the pandemic situation.
• Empowering the Central Government to exclude COVID 19 related debt from the definition of “default” under the Code for the purpose of triggering insolvency proceedings.

B. Decriminalisation of Companies Act defaults

• Decriminalization of Companies Act violations involving minor technical and procedural defaults (shortcomings in CSR reporting, inadequacies in board report, filing   defaults, delay in holding AGM).
• Majority of the compoundable offences sections to be shifted to internal adjudication mechanism (IAM) and powers of RD for compounding enhanced (58 sections to be   dealt with under IAM as compared to 18 earlier).
• The Amendments will de-clog the criminal courts and NCLT
• 7 compoundable offences altogether dropped and 5 to be dealt with under alternative framework.

C. Ease of Doing Business for Corporates

• Improvement in rankings in ‘starting a business’ and ‘insolvency resolution’ have contributed to the overall improvement in India’s ranking on EoDB.
• Further key reforms to include –
• Direct listing of securities by Indian public companies in permissible foreign jurisdictions.
• Private companies which list NCDs on stock exchanges not to be regarded as listed companies.
• Including the provisions of Part IXA (Producer Companies) of Companies Act, 1956 in Companies Act, 2013.
• Power to create additional/ specialized benchesfor NCLAT
• Lower penalties for all defaults for Small Companies, Oneperson Companies, Producer Companies & Start Ups.

Public Sector Enterprises- related steps

• Government will announce a new policy whereby – 
• List of strategic sectors requiring presence of PSEs in public interest will be notified.
• 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 (timing to be based on feasibility etc.)
• To minimize wasteful administrative costs, the number of enterprises in strategic sectors will ordinarily be only one to four; others will be privatized/ merged/ brought under holding companies.

State governments and related resources

• States net borrowing ceiling for 2020-21 is Rs. 6.41 lakh crores, based on 3% of Gross State Domestic Product (GSDP)
• 75% thereof was authorised to them in March 2020 itself and timing is left to the States
• States have so far borrowed only 14% of the limit authorised. 86% of the authorised borrowing remains unutilized.
• Nevertheless, states have been asking for special increase in borrowing from 3% to 5%.
• In view of the unprecedented situation, the Centre has decided to accede to the request and increase borrowing limits of States from 3% to 5%, for 2020-21 only.
• This will give States extra resources of Rs. 4.28 lakh crores

Supporting State Governments & promoting state level reforms

Part of the borrowing will be linked to 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
• Reform linkage will be in four areas: universalisation of ‘One Nation One Ration card’, Ease of Doing Business, Power distribution and Urban local body revenues
• A specific scheme will be notified by Department of Expenditure on the following pattern:
• Unconditional increase of 0.50%
• 1% in 4 tranches of 0.25%, with each tranche linked to clearly specified, measurable and feasible reform actions
• Further 0.50%if milestones are achieved in at least three out of four reform areas

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