Finance Minister Nirmala Sitharaman Announced 8 Major Economic Relief Measures on June 28 2021

Finance Minister Nirmala Sitharaman addressed a press conference today at 3 pm, June 28, 2021, and announced some economic relief measures for all those sectors affected by the second wave of the COVID-19 pandemic in the country.

Finance Minister announced economic relief measures related to healthcare, tourism, agriculture, infrastructure, and export, among others.

FM Nirmala Sitharaman was live to address this press conference along with Anurag Thakur (Minister of State for Finance and Corporate Affairs), T. V. Somanathan (Finance Secretary) and other members.

SchemePeriodAmount (Rs. in Crore)Remarks
1. Loan Guarantee Scheme for COVID Affected Sectors2021-221,10,000
2. Emergency Credit Line Guarantee Scheme (ECLGS)2021-221,50,000Expansion
3. Credit Guarantee Scheme for Micro Finance Institutions2021-227,500
4. Scheme for tourist guides/stakeholders2021-22Covered in #1
5. Free One Month Tourist Visa to 5 Lakh Tourists2021-22100
6. Extension of Atma Nirbhar Bharat Rozgar Yojana2021-22
7. Additional Subsidy for DAP & P&K fertilizers2021-2214,775
8. Free food grains under PMGKY from May to November, 20212021-2293,869

8 Economic Reliefs From Pandemic:

1. Loan guarantee scheme for Covid asffected sectors

Health Sector : Rs. 50,000 crore

Aimed at upscaling medical infrastructure targeting underserved areas.

  • Guarantee cover for expansion and new project related to health/medical infrastructure in cities other than 8 metropolitan cities.
  • Guarantee coverage : 50% for expansion and 75% for new projects.
  • For aspirational districts, guarantee cover of 75% for both new project and expansion.
  • Maximum Loan : Rs. 100 crore ; Guarantee duration : up to 3 Years
  • Interest rate capped at 7.95%.
  • Guarantee by National Credit Guarantee Trustee Company Limited.

Other Sectors: Rs. 60,000 crore

  • Interest rate capped at 8.25% p.a.
  • Decisions at later stage based on evolving needs.

Normal interest without guarantee cover is 10-11%.

2. Emergency credit line guarantee scheme(ECLGS)

  • Launched as a part of Atma Nirbhar Bharat package in May, 2020.
  • ECLGS-1.0, 2.0 and 3.0 have resulted in credit disbursal of 2.69 lakh crore to 1.1 crore units by 12 public sector banks, 25 private sector banks and 31 non-banking financial companies.
  • contact intensive sectors already covered and shall be continued. Rs. 4000 crore given to these sectors through this window so far.
  • Limit of admissible guarantee and loan amount proposed to be increased above existing level of 20% of outstanding on each loan.
  • Sector wise details will be finalized as per the evolving needs.
  • Overall cap of admissible guarantee to be raised from Rs. 3 lakh crore to Rs. 4.5 lakh crore.

3. Credit guarantee scheme for Micro Finance Institutions (MFIs)

  • Guarantee will be provided to Scheduled Commercial Banks for loans to new or existing NBFC-MFIs or MFIs for on lending upto Rs 1.25 lakh to approximately 25 lakh small borrowers.
  • Interest rate on loans from banks to be capped at MCLR plus 2%.
  • Maximum loan tenure 3 years, 80% of assistance to be used by MFI for incremental lending, interest at least 2% below maximum rate prescribed by RBI.
  • Focus on new lending, not repayment of old loans.
  • Loans to borrowers to be in line with extant RBI guidelines such as number of lenders, borrower to be member of JLG, ceiling on household income & debt.
  • All borrowers (including defaulters upto 89 days) eligible.
  • Guarantee cover for funding provided by MLIs to MFIs/NBFC-MFIs till March 31, 2022 or till guarantees for an amount of Rs.7,500 crore are issued, whichever is earlier.
  • Guarantee upto 75% of default amount for upto 3 years through National Credit Guarantee Trustee Company (NCGTC).
  • No guarantee fee to be charged by NCGTC.

4. Scheme for tourist guides / stakeholders

  • Under new Loan Guarantee Scheme for COVID Affected Sectors, working capital/personal loans will be provided to people in tourism sector to discharge liabilities and restart businesses impacted due to COVID-19.
  • The scheme will cover:
    ➤ 10,700 Regional Level Tourist Guides recognised by Ministry of Tourism and Tourist Guides recognised by the State Governments.
    ➤ Travel and Tourism Stakeholders (TTS) recognized by Ministry Tourism (904).
  • Loans will be provided with 100% guarantee, up to the following limits:
    ➤ Rs. 10,00,000 for TTS (per agency)
    ➤ Rs. 1,00,000 for tourist guides licenced at Regional or State level
  • No processing charges, waiver of foreclosure/prepayment charges. No additional collateral requirement.
  • Scheme be administered by the Ministry of Tourism through NCGTC.

5. Free one month tourist visa for 5 lakh tourists

  • 10.93 million foreign tourists visited India in 2019, spent US $ 30.098 billion on leisure and business.
  • Average daily stay for a foreign tourist in India is 21 days. Average daily spending of a tourist in India is around $34 (Rs 2400).
  • Once Visa issuance is restarted, the first 5 lakh Tourists Visas will be issued free of charge.
  • Benefit will be available only once per tourist.
  • The scheme will be applicable till 31″ March, 2022 or till 5,00,000 visas are issued, whichever is earlier.
  • Total financial implications- Rs 100 Crore.

6. Extension of Atma Nirbhar Bharat Rozgaar Yojana

  • Launched on 1 Oct, 2020. Incentivizes employers for creation of new employment, restoration of loss of employment through EPFO.
  • Approved outlay Rs. 22,810 crore for 58.50 lakh estimated beneficiaries. Last date for registration is 30.06.2021.
  • Subsidy provided for two years from registration for new employees drawing monthly wages less than Rs. 15000 for:
    ➤ Both Employer’s and Employee’s share of contribution (total 24% of wages) for establishment strength upto 1000 employees.
    ➤ Only Employee’s share (12 % of wages) in case of establishment strength of more than 1000.
  • Benefit of Rs. 902 Cr given to 21.42 lakh beneficiaries of 79,577 establishments till 18.06.2021.
  • Scheme extended from 30.6.2021 to 31.03.2022.

7. Additional subsidy for DAP & P&K fertilizers

  • Record procurement of 432.48 Lakh MT of wheat in Rabi Marketing Season (RMS) 2021-22 (against 389.92 Lakh MT in RMS 2020-21).
  • Rs 85,413 Crore paid to farmers.
  • Existing NBS subsidy was Rs.27,500 crores in FY 2020-21 which has been increased to Rs. 42,275 crore in FY 2021-22.
  • Additional amount of Rs.14,775 crore to be provided. This includes Rs.9,125 crore additional subsidy for DAP and Rs.5,650 crore additional subsidy for NPK based complex fertilizer.

8. Free food grains under PMGKAY from May to November 2021

  • PMGKAY was launched on 26th March 2020 to ameliorate the hardships faced by the poor due to economic disruption caused by COVID 19 Pandemic
  • The scheme was launched initially for the period from April to June 2020. However, keeping in view the need for continuous support to the poor and the needy, the scheme was extended till November 2020.
  • The total cost of the scheme in 2020-21 was Rs. 133,972 crore.
  • In the wake of the second wave of COVID-19, the scheme was relaunched in May 2021 to ensure food security of poor/vulnerable.
  • 5 kg of food grains will be provided free of cost to NFSA beneficiaries from May to November 2021.
  • Estimated financial implications are Rs 93,869 cr, bringing the total cost of PMGKY to Rs 2,27,841 Crore.