Finance Minister Nirmala Sitharaman on Sunday announced the fifth tranche of the Rs 20 trillion economic package. The fifth and last set of measures focuses on MGNREGA, health and education (rural and urban), businesses, decriminalisation of Companies Act, etc.
1. The FM announced that the government would allocate additional an Rs 40,000 crore, over and above the budgeted Rs 61,000 crore, to the Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS) in order to generate more employment in the rural sector.
2. The second set of measures was related to ramping up of health infrastructure and education.
The FM said public expenditure on health will be increased. Not only, will all districts have an infectious disease block in their hospitals, public health labs will also be set up at all block levels. Research in health will be also increased, and the National Digital Health blueprint will be implemented.
For students hit by the pandemic, she said top 100 universities would be automatically permitted to start online courses by May 30, 2020. An initiative for psycho-social support for students, teachers and families for mental health and emotional well-being, known as Manodarpan, will be launched immediately.
3. The third set of announcements was related to companies
FM said any debt incurred by companies on account of the coronavirus would not be included in the category of defaults and no fresh insolvency proceedings would be initiated for a year.
For MSMEs: A special insolvency framework will be notified under Section 240A of IBC.The finance minister announced that the minimum threshold to initiate insolvency proceedings would be raised to Rs 1 crore from Rs 100,000, in a move that would benefit MSMEs. An ordinance will be passed for raising this threshold.
4. The fourth set of measure was related to corporate affairs
Sitharaman said companies would be allowed to directly list securities in permissible foreign jurisdictions and listings for non-convertible debentures. Such companies will not be treated as listed companies.
She also announced decriminalisation of the Companies Act in violations involving minor technical and procedural defaults including shortcoming in CSR reporting, inadequacies in board reports, filing defaults and delay in holding AGMs. A majority of the compoundable offences sections will be shifted to internal adjudication mechanism (IAM), she said, adding that amendments will be brought through an Ordinance and will de-clog the criminal courts and NCLT. Seven compoundable offences under the Companies Act will be dropped altogether and five will be dealt with under an alternative framework.
5. The FM said that the government was also working on the next phase of 'ease of doing business' reforms.
6. The sixth set of measure deals with public sector enterprise policy.
The FM said that a self-reliant India needed a coherent policy. In one of the crucial announcement, she said that PSUs will be privatised. All sectors are open to the private sector now.
Govt will announce new policies related to public sector undertakings (PSUs) soon that will define strategic sectors which will have not more than four PSUs. 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 those sectors only one to four public sector enterprises (PSEs) will be present. She said in order to minise wasteful administrative costs, the number of enterprises in strategic sectors will ordinarily be only one to four. "Others will be privatised/merged/brought under holding companies," she said.
7. Lastly, the FM announced measures to support state govts
States have so far borrowed only 14 per cent of the limit which is authorised for them and 86 per cent of the limit remains unutilised. The Centre has decided to increase borrowing limits of states from 3 per cent to 5 per cent of Gross State Domestic Product (GSDP) for 2020-21. States will get to borrow Rs 4.28 trillion more now.