FM Nirmala Sitharaman speech : 5th and Final tranche - May 17, 2020
*FM Nirmala Sitharaman speech : 5th and Final tranche*
• Today marks the last of the tranches of announcements subsequent to PM Modi's address to the nation.
• In the last four days of announcements, we have had several reforms addressing the land, labour, liquidity and laws. Today's announcements will be continuing that series.
• Soon after lockdown, we came with PM Garib Kalyan Package, we provided food grains to those who needed it, we did not want to scout for money to search for grains. Pulses too were given 3 months in advance. I appreciate the concerted efforts of FCI, NAFED and states, giving pulses and grains in huge quantities, despite logistical challenges.
• Today I have 7 such steps to tell you, the order is: MGNREGS, Health (rural and urban) and Education related, businesses and COVID-19, decriminalisation of Companies Act, Ease of Doing Business, Public Sector Enterprises- related steps and state governments and related resources.
• PM Garib Kalyan Yojana used the technology available and was able to make direct transfer of cash for various categories.
• Would like to show what we have done in the past two months in light of the COVID-19 crisis.
Health-related steps that have been taken: Rs 15,000 crore was released by the PM, insurance cover of Rs 50 lakhs per person for health professionals was announced, made sure telemedicine comes into play, capacity building exercises have been taken up, for protection of health care workers, amendment of Epidemic Diseases Act was required which was undertaken.
• Rs. 2000 direct cash transferred for 8.19 crore farmers till May 16.
• 20 crore Jan Dhan account holding women got Rs 10, 025 crore. 2.2 crore building and construction workers got Rs 3,950 crore. 6.81 crore people got free LPG cylinders. 12 lakh EPFO holders got online withdrawal of advance.
• NSAP beneficiaries got Rs 1,405 crore in first installment and ? 1,402 crore in 2nd instalment, target of Rs 3,000 crore nearly achieved.
• When the lockdown was extended, free grains and dal were given for another 2 months. Shramik Special Trains were started when it was possible for workers to move, states were requested to bring workers to stations, 85% cost was borne by Central Govt.
• MGNREGS: Additional funding of Rs 40,000 crore to the scheme over and above the Budgetary Estimate.
• Health: All districts will have infectious disease hospitals while at the block-level, public health labs will be set up.
• Education: PM eVidya programme to be launched immediately. Each Classroom from 1 to 12 will have one TV channel. Special e-content for visually & hearing impaired. Top 100 universities will be permitted to start online courses by May 30, 2020.
• IBC related matters: Debts related to COVID shall be excluded from defaults under IBC. No fresh insolvency proceeding will be initiated up to 1 year. At the moment MCA has extended this by 6 months, we intend to extend this by another 6 months.
For MSMEs a special insolvency framework will be notified under section 240-A of IBC. Minimum threshold to initiate insolvency proceedings raised to Rs 1 crore from the earlier Rs 1 lakh, which largely insulates MSMEs.
44% recovery has been achieved since inception of Insolvency and Bankruptcy Code. During Covid-19, we made sure that industries do not suffer.
• Decriminalising of Companies Act violations involving minor technical and procedural defaults. Majority of 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.
• Other reforms related to corporates: Direct listing of securities by Indian public companies in permissible foreign jurisdictions. Pvt companies that list non-convertible debentures (NCDs) on stock exchanges not to be regarded as listed companies.
• Would like to announce a public sector enterprise policy. Need a coherent policy wherein pvt sector will be allowed to participate in all sectors while public sector enterprises will continue to play an important role.
GoI will annnounce new policy which will broadly categorise strategic sectors and others. List of strategic sectors requiring the presence of PSEs in public interest will be notified. In such strategic sectors, at least one PSE will be there but pvt sector will also be allowed. In other sectors, PSEs will be privatised. TO minimise wasteful administrative costs, number of enterprises in strategic sectors will ordinarily be only one to four, others will be privatised/merged/brought under holding companies.
• LIVE | We recognise that like the Centre, states also facing sharp decline in revenues. Despite this, we have extended generous support to states in this hour of need. Have devolved Rs 46,038 crore in April as taxes, as per the Budgetary estimates. Revenue deficit grants of Rs 12, 390 crore was given to states in time in April despite Centre's stressed resources. The funds under the State Disaster Relief Fund (SDRF) were released in advance (Rs 11,092 crore) in first week of April Health Ministry released over Rs 4,113 crore for dirct anti-COVID activities. At the Centre's request, the RBI has increased the ways and means advance limit of states increased by 60 percent. Number of days states can be in continuous overdraft position increased from the earlier 14 days to 21 days now. Number of days states can be in overdraft in a quarter increased from 32 to 50 days.
• States net borrowing ceiling for 2020-21 is Rs 6.41 lakh crore based on 3% of 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 unutilised. In view of the unprecedented situation, Centre has decided to accede to the request of states and increase the borrowing limits of states from 3% to 5% for 2020-21 only. This will give states extra resources of Rs 4.28 lakh crore.
• Part of the borrowing by states will be linked to specific reforms. From 3-3.5%, the 0.5% will be an unconditional increase. Next 1% to be released in 4 tranches of 0.25%, with each tranche linked to clearly specified, measurable and feasible reform actions. Further 0.5% will be given if milestones are achieved in at least three out of the four reform areas.
This completed the announcements.
• Today marks the last of the tranches of announcements subsequent to PM Modi's address to the nation.
• In the last four days of announcements, we have had several reforms addressing the land, labour, liquidity and laws. Today's announcements will be continuing that series.
• Soon after lockdown, we came with PM Garib Kalyan Package, we provided food grains to those who needed it, we did not want to scout for money to search for grains. Pulses too were given 3 months in advance. I appreciate the concerted efforts of FCI, NAFED and states, giving pulses and grains in huge quantities, despite logistical challenges.
• Today I have 7 such steps to tell you, the order is: MGNREGS, Health (rural and urban) and Education related, businesses and COVID-19, decriminalisation of Companies Act, Ease of Doing Business, Public Sector Enterprises- related steps and state governments and related resources.
• PM Garib Kalyan Yojana used the technology available and was able to make direct transfer of cash for various categories.
• Would like to show what we have done in the past two months in light of the COVID-19 crisis.
Health-related steps that have been taken: Rs 15,000 crore was released by the PM, insurance cover of Rs 50 lakhs per person for health professionals was announced, made sure telemedicine comes into play, capacity building exercises have been taken up, for protection of health care workers, amendment of Epidemic Diseases Act was required which was undertaken.
• Rs. 2000 direct cash transferred for 8.19 crore farmers till May 16.
• 20 crore Jan Dhan account holding women got Rs 10, 025 crore. 2.2 crore building and construction workers got Rs 3,950 crore. 6.81 crore people got free LPG cylinders. 12 lakh EPFO holders got online withdrawal of advance.
• NSAP beneficiaries got Rs 1,405 crore in first installment and ? 1,402 crore in 2nd instalment, target of Rs 3,000 crore nearly achieved.
• When the lockdown was extended, free grains and dal were given for another 2 months. Shramik Special Trains were started when it was possible for workers to move, states were requested to bring workers to stations, 85% cost was borne by Central Govt.
• MGNREGS: Additional funding of Rs 40,000 crore to the scheme over and above the Budgetary Estimate.
• Health: All districts will have infectious disease hospitals while at the block-level, public health labs will be set up.
• Education: PM eVidya programme to be launched immediately. Each Classroom from 1 to 12 will have one TV channel. Special e-content for visually & hearing impaired. Top 100 universities will be permitted to start online courses by May 30, 2020.
• IBC related matters: Debts related to COVID shall be excluded from defaults under IBC. No fresh insolvency proceeding will be initiated up to 1 year. At the moment MCA has extended this by 6 months, we intend to extend this by another 6 months.
For MSMEs a special insolvency framework will be notified under section 240-A of IBC. Minimum threshold to initiate insolvency proceedings raised to Rs 1 crore from the earlier Rs 1 lakh, which largely insulates MSMEs.
44% recovery has been achieved since inception of Insolvency and Bankruptcy Code. During Covid-19, we made sure that industries do not suffer.
• Decriminalising of Companies Act violations involving minor technical and procedural defaults. Majority of 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.
• Other reforms related to corporates: Direct listing of securities by Indian public companies in permissible foreign jurisdictions. Pvt companies that list non-convertible debentures (NCDs) on stock exchanges not to be regarded as listed companies.
• Would like to announce a public sector enterprise policy. Need a coherent policy wherein pvt sector will be allowed to participate in all sectors while public sector enterprises will continue to play an important role.
GoI will annnounce new policy which will broadly categorise strategic sectors and others. List of strategic sectors requiring the presence of PSEs in public interest will be notified. In such strategic sectors, at least one PSE will be there but pvt sector will also be allowed. In other sectors, PSEs will be privatised. TO minimise wasteful administrative costs, number of enterprises in strategic sectors will ordinarily be only one to four, others will be privatised/merged/brought under holding companies.
• LIVE | We recognise that like the Centre, states also facing sharp decline in revenues. Despite this, we have extended generous support to states in this hour of need. Have devolved Rs 46,038 crore in April as taxes, as per the Budgetary estimates. Revenue deficit grants of Rs 12, 390 crore was given to states in time in April despite Centre's stressed resources. The funds under the State Disaster Relief Fund (SDRF) were released in advance (Rs 11,092 crore) in first week of April Health Ministry released over Rs 4,113 crore for dirct anti-COVID activities. At the Centre's request, the RBI has increased the ways and means advance limit of states increased by 60 percent. Number of days states can be in continuous overdraft position increased from the earlier 14 days to 21 days now. Number of days states can be in overdraft in a quarter increased from 32 to 50 days.
• States net borrowing ceiling for 2020-21 is Rs 6.41 lakh crore based on 3% of 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 unutilised. In view of the unprecedented situation, Centre has decided to accede to the request of states and increase the borrowing limits of states from 3% to 5% for 2020-21 only. This will give states extra resources of Rs 4.28 lakh crore.
• Part of the borrowing by states will be linked to specific reforms. From 3-3.5%, the 0.5% will be an unconditional increase. Next 1% to be released in 4 tranches of 0.25%, with each tranche linked to clearly specified, measurable and feasible reform actions. Further 0.5% will be given if milestones are achieved in at least three out of the four reform areas.
This completed the announcements.
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