Finance Minister Nirmala Sitharaman on Sunday (May 17, 2020) announced the fifth and final installment of the economic package aimed at reviving the country’s coronovirus-hit economy.
In his introductory remarks during the 5th press conference on the incentive package to fight COVID-19 under the Aatma Nirbhar Bharat campaign, FM Nirmala Sitharaman, in his address to the nation on May 12, 2020, foresighted by Prime Minister Narendra Modi mentioned.
Quoting PM Modi, Sitharaman said, “As a nation, we stand at a very important juncture. The COVID-19 pandemic has brought a message and an opportunity. We need to make India a poorer India now.” . “
Announcing the 5th and final installment of measures for government reforms and advocates, Sitharaman gave eight measures for areas such as providing employment, helping businesses, ease of doing business and state governments as well as education and health be extended.
The eight remedies are as follows:
1.Increase in allocation for MGNREGS by Rs 40,000 crore to boost employment
The government will now allocate an additional Rs 40,000 crore under MGNREGS. This will help generate about 300 crore man-days to meet the requirement of more work, including returning migrant workers even during the monsoon season. The creation of a large number of sustainable and livelihood assets, including water conservation assets, will boost the rural economy through higher production.
2. Health reform and initiative
Public expenditure on health will be increased by establishing health and welfare centers in rural and urban areas and investing in grass-roots health institutions. Establish hospital block of infectious diseases in all districts and strengthen lab network and monitoring by integrated public health laboratories in all districts and block-level lab and public health unit for management of epidemics. In addition, a National Institutional Forum for Health by ICMR will encourage research and the implementation of the National Digital Health Blueprint under the National Digital Health Mission.
3. Technology-driven education with equity post-COVID
PM eVIDYA, a program for multi-mode access for digital/online education, will be launched immediately. An initiative for psycho-social support for students, teachers, and families for psychopathology, mental health, and emotional well-being is to be initiated immediately as well. New national curricula and educational structures for schools, early childhood, and teachers will also be launched. National Founder Literacy and Numeracy Mission to ensure that every child achieves learning levels and results in grades 5 to 2025 by December 2020.
4. Further growth in Ease of Doing Business through IBC related measures
The minimum limit to commence insolvency proceedings has been increased to Rs. 1 crore (from Rs. 1 lakh, which largely inspired MSME). The Special Insolvency Resolution Framework for MSMEs under Section 240A of the Code will be notified soon. Suspension of a new beginning of insolvency proceedings up to one year, depending on the state of the epidemic. Empowering the Central Government to exclude COVID 19 related debt from the definition of “default” under the Code for the purpose of triggering insolvency proceedings.
5. Reducing the omission of the Companies Act
Minor technical and procedural lapses such as violation of the Companies Act, deficiencies in CSR reporting, inadequacies in board reports, filing of defaults, delay in stopping the AGM. The amendment will de-clause criminal courts and NCLT. 7 compoundable offenses were completely eliminated and 5 were dealt with under the alternative framework.
6. Ease of doing business for corporates
Key improvements include:
*Direct list of securities by Indian public companies in permitted foreign courts.
*Private companies listing NCDs on stock exchanges should not be considered as listed companies.
*Incorporating the provisions of Part IXA (Producer Companies) of the Companies Act, 1956 into the Companies Act, 2013.
*Power to create additional / exclusive benches for NCLAT.
*Reduced penalties for all defaults for small companies, one-man companies, producer companies and start-ups.
7. Public Sector Enterprise Policy for a New, Self-reliant India
The government will announce a new policy which will –
*A list of strategic areas requiring the presence of public undertakings in the public interest will be notified.
*In strategic areas, at least one enterprise will remain in the public sector but private sector will also be allowed.
*In other areas, PSE will be privatized (will be based on time, feasibility, etc.).
*To reduce wasteful administrative costs, the number of enterprises in strategic areas will typically be only one to four; Others will be brought under privatization / merger / holding companies.
8. Assistance to State Governments
The Center has decided to increase the lending limit of the states from 3% to 5% only for 2020-21. This would allow states to pay Rs. Additional resources of 4.28 lakh crore Rs. Part of the lending will be linked to specific reforms (including recommendations of the Finance Commission). Reform linkage will be in four areas: universalization of nation – one nation one ration card, ease of doing business, power distribution, and urban local body revenue.
A specific plan will be notified by the Department of Expenditure on the following pattern:
*Unconditional increase of 0.50%.
*1% in 4 stages of 0.25%, each installment clearly linked to specified, measurable, and feasible improvement actions.
*Further 0.50% if milestones are achieved in at least three of the four improvement areas.
These were the major attractions of the Finance Minister’s announcement for the fifth and final installment of the economic package.
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