Promising Relief Measures Announcement by FM Nirmala Sitharaman

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Among a host of measures – new Credit Guarantee Scheme to facilitate new lending among smallest borrowers.

Against the economic slump caused by the second wave of COVID-19 in the country, FM Nirmala Sitharaman announced  a number of new relief measures, which was welcomed by the industry bodies.

The business sectors that were hit badly, can now look at some relief. Rs 50,000 crore has been set aside for the health sector among the Rs 1.1 lakh crore loan guarantee scheme that was announced for COVID-affected sectors. Moreover, an additional Rs 23,220 crore announced for public health (for one year). The production-linked incentive (PLI) scheme for large scale electronics manufacturing has been extended by one year (till fiscal year 2025-26). She also rolled out a loan guarantee scheme for tourist guides, travel agencies at a time when the tourism sector has been among the worst-hit segments in the economy, and small stakeholders have been facing financial difficulties.

Relief for small borrowers

FM pointed out that “Under the Credit Guarantee Scheme we aim to reach out to 25 lakh people who are absolutely small borrowers”.

Then Eastern Regional Agricultural Marketing Corporation (NERAMAC) – established in 1982 to support farmers of North East in getting remunerative prices of agri-horticulture products – now proposes to set up North-Eastern Centre for Organic Cultivation, facilitating equity finance to entrepreneurs.

Another prominent point made was – Credit Guarantee Scheme will facilitate loans to 25 lakh persons through Micro Finance Institutions (MFIs). It was emphasized that 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.

Other highlights:

• For COVID Suraksha Mission – Rs 900 crores provided for research and development of the Indian COVID vaccine to the Department of Biotechnology.

• New job scheme called Atma Nirbhar Rozgar Yojana launched to create jobs in the country. The new scheme will be effective from October 1, 2020.

• Additional Rs 10,000 crore fund announced for rural economy.

• Rs 6,000 crore equity infusion in National Infrastructure & Investment Fund (NIIF) debt platform by 2025.

• Rs 3,000 crores to be released to EXIM Bank for promotion of project exports through Lines of Credit under IDEAS Scheme.

• Rs 65,000 crore for subsidised fertilisers.

• Support for Construction & Infrastructure-Performance security on contract to be reduced to 3% instead of 5%.

• In the real estate sector, focus on providing income tax relief to homebuyers and home developers.

• Rs 18,000 crore additional fund announced for urban realty. 18 lakh houses to be completed with additional fund which will also help in generating jobs in the housing sector.

• Government support to contractors engaged in construction and infrastructure.

• 135 real estate projects all over the country have been approved under the SWAMIH Yojana with an outlay of Rs 13,200 crore.

• Emergency Credit Line Guarantee Scheme (ECGLS) extended till March 31, 2021. Scheme also extended to 26 stressed sectors.

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