The battered economy amid Covid-19 crisis got another booster dose as on Monday India approved of new money plans. Let’s find out what the new measures are and how they can benefit us.
India cleared a Rs 20,000 crore debt scheme, helping 2 lakh MSMEs increase funds. The Centre also approved of a Rs 50,000 crore fund for this sector and provided relief for farmers.
However, many have criticised the loan facilities for the MSME sector and argued that banks don’t follow central orders. Also, direct cash support to small traders would have been more beneficial.
— Mahendra K SHUKLA (@centenvir) June 2, 2020
The new money plans in 4 points
- The Centre raised the investment and turnover threshold for MSMEs and offered more support to farmers. Now farmers will get higher prices for kharif crops, i.e. 50%-83% more returns. This is a positive step, especially for the cyclone-hit farmers in Bengal.
- Now street vendors can opt for micro loans up to Rs 10,000. This is the direct reflection of the PM’s “Atmanirbhar India” project. Any street food vendor, hawkers, roadside booksellers can revamp their businesses through this.
- The investment and turnover limits have been increased for MSMEs to Rs 50 crore and Rs 250 crore respectively. The previous limits announced by the Centre about its Rs 20 lakh crore stimulus package were Rs 10 crore for investment and Rs 100 crore for turnover. The Modi cabinet raised the limits following feedback from the industry leaders.
- These limits are excluded of exports. This will help MSMEs trade freely in the overseas market. Monday’s cabinet gave boost to these two main sectors. Traders can aim for better return and less taxes.
A special scheme called PMSVANidhi (Street Vendor AtmaNirbhar Nidhi) has been launched. The scheme will help our vada pav, panipuri wallahs or any such street vendors to opt for working capital loans upto Rs 10,000. This they can repay over a year in small installments without facing any penal actions.
The government aims to start the new scheme in July to help 5 millions street vendors across India.
Seventy days without any street food, courtesy lockdown! Hope we get to gather around our panipuri and chaat wallahs soon once again, fingers crossed!
REGISTERED STREET VENDORS VENDING IN THE STREETS DURING COVID 19 LOCKDOWN FOR SUPPLYING FRESH VEGETABLES, FRUITS. MC CHD HAS ISSUED SPECIAL CURFEW PASSES TO SUCH VENDORS FOR GIVING THEM TO CHANCE ON LIVELIHOOD AND SERVE NATION IN CRISIS. @ChandigarhCmc @MCChandigarh @MoHUA_India pic.twitter.com/gmcB0qYhuM
— firstname.lastname@example.org (@DayCmmu) May 21, 2020
Farmers and small growers
Farmers now will get an increased minimum support price, ranging from Rs 55 to Rs 755 per quintal for 14 varieties of kharif crops in the 2020-21 season.
The Centre has given farmers additional time till August 31 to repay their short-term loans that are upto Rs 3 lakh. The Centre will ensure 3% prompt repayment incentive to growers and support from banks.
Former #RBI deputy governor R Gandhi on Monday expressed doubt over the efficacy of the government's stimulus package, terming the aim of Rs 7.9 lakh crore uptick in lending to small businesses, agriculture and power discoms as not "feasible".https://t.co/RkQsvOIOtT
— Economic Times (@EconomicTimes) June 1, 2020
A clear sum up of the total stimulus package
Prime Minister Narendra Modi recently announced Rs 20 lakh Covid-19 relief package to boost the economy. Finance minister Nirmala Sitharaman divided the entire package in 5 tranches. Here’s a gist.
The first tranche focused on MSMEs, salaried workers and non-bank lenders. The industry received collateral-free loan plans. A sum of Rs 30,000 crore special liquidity scheme for non-bank lenders. The Centre announced from now on, 10% instead of previous 12% EPF will be deducted from employees’ salaries.
The FM announced free food grains, One Ration One Card, Mudra Shishu Loan, affordable rented accommodation, funds support to tribals, street vendors and small farmers in the second tranche of stimulus package.
Farmers, food processing industries, animal husbandry, fisheries, livestock, dairy and poultry sectors got marketing reforms, price and quality support among other such boosters from the Centre. The FM announced various schemes and loans for the stakeholders of these sectors.
This tranche covered defence production, minerals, coal, social infrastructure plans, airspace management and space and atomic power sectors with various economic reforms.
The government announced monetary measures for health, education and MGNREGS segments in the fifth tranche of the main stimulus package. The states received special additional resources as their borrowing limits increased to 5% for FY21.
The package to recover from health crisis is missing one crucial set of provisions – allocations to improve public health system.
— Oxfam India (@OxfamIndia) June 1, 2020
Critics have found lacunae in the Rs 20 lakh crore stimulus package as it surprisingly missed out on the health sector. The new money plans also doesn’t touch upon this industry. Many questioned the feasibility of the Centre’s lending assurance to small trades, agriculture and power sectors. However, some hailed the package.
“It (the economic package) is certainly not an eyewash. It is an ambitious plan to redefine a lot of the economic rules of the game that we are operating under and hoping that this will give a boost to the supply side which will drive economic recovery.” Nobel laureate Abhijit Vinayak Banerjee. Source: News18.com