Final tranche of economic package announced – PSUs to health and education

Union Finance Minister Nirmala Sitharaman today announced the fifth and final tranche of the ₹ 20 lakh crores Atmanirbhar Bharat economic package. The final tranche of the Self-Reliant India economic package focused on the health sector, ease of doing business, online education, MNREGA, decriminalisation of Companies Act, Public Sector Undertaking (PSU), and state governments.

MNREGA

The government will now allocate an additional ₹ 40,000 crores under MGNREGS. It will help generate nearly 300 crore person-days in total and it will be addressing the need for work for the returning migrants in Monsoon season as well. This will boost the rural economy through higher production.

Health Sector

The public expenditure on health will be increased. Investments at grassroots for health and wellness centres both at rural and urban levels to ramp up Health and Wellness Centres in rural and urban areas. All district hospitals will have infectious disease blocks.

• Strengthening of lab network and surveillance–
  • Integrated Public Health Labs in all districts & block level Labs & Public Health Unit to manage pandemics.
• Encouraging Research–National Institutional Platform for One health by ICMR.
• National Digital Health Mission: Implementation of National Digital Health Blueprint.

Education Sector

• PM eVIDYA- A programme for multi-mode access to digital/online education to be launched immediately; consisting of:
  • DIKSHA for school education in states/UTs: e-content and QR coded Energized Textbooks for all grades (one nation, one digital platform)
  • One earmarked TV channel per class from 1 to 12 (one class, one channel)
  • Extensive use of Radio, Community Radio and Podcasts.
  • Special e-content for visually and hearing impaired.
  • Top 100 universities will be permitted to automatically start online courses by 30th May 2020.

• Manodarpan- An initiative for psychosocial support of students, teachers and families for mental health and emotional wellbeing to be launched immediately.
• New National Curriculum and Pedagogical framework for school, early childhood and teachers will be launched: integrated with global and 21st-century skill requirements
• National Foundational Literacy and Numeracy Mission for ensuring that every child attains Learning levels and outcomes in grade 5 by 2025 will be launched by December 2020.

Ease of Doing Business

• Special insolvency resolution framework for MSMEs to be notified soon – Minimum threshold to initiate insolvency proceedings raised from ₹ 1 lakh to ₹ 1 crore. No fresh insolvency proceedings will be initiated for up to one year depending upon the pandemic situation.
• Empowering Central Government to exclude COVID 19 related debt from the definition of “default” under the Code for the purpose of triggering insolvency proceedings.
• Further key reforms to include–
  • Direct listing of securities by Indian public companies in permissible foreign jurisdictions.
  • Private companies which list non-convertible debentures (NCDs) on stock exchanges not to be regarded as listed companies.

Decriminalisation of Companies Act defaults

• Decriminalization of Companies Act violations involving minor technical and procedural defaults (shortcomings in CSR reporting, inadequacies in board report, filing defaults, delay in holding AGM).
• Majority of the compoundable offences sections to be shifted to internal adjudication mechanism. It will de-clog the criminal courts and NCLT.

Public Sector Enterprise Policy

• Need for a new coherent policy—where all sectors are open to the private sector while public sector enterprises (PSEs) will play an important role in defined areas.
• The government will announce a new policy which will broadly categorise the strategic sectors and other sectors.
  • A list of strategic sectors requiring the presence of PSEs in the public interest will be notified.
  • In strategic sectors, the number of PSEs will ordinarily be only one to four; others will be privatized/merged/brought under holding companies.
  • In other sectors, PSEs will be privatized.

State Governments

• Centre, like the states, has faced a sharp decline in revenues. Centre has extended support to states:
  • Devolution of taxes (₹ 46,038 crores) in April.
  • Revenue Deficit Grants to states (₹ 12,390 crores) given on time in April and May.
  • Advance release of SDRF (₹ 11,092 crores) funds in the first week of April.
  • Release of over ₹ 4,113 crores from Health Ministry for direct anti-COVID activities.
  • RBI has increased Ways & Means Advance limits of States by 60%. The number of days state can be in continuous overdraft from 14 days to 21 days. The number of days state can be in overdraft in a quarter from 32 to 50 days.
• States net borrowing ceiling for 2020-21 is ₹ 6.41 lakh crores, based on 3% of Gross State Domestic Product (GSDP). 75% thereof was authorised to them in March 2020. States have so far borrowed only 14% of the limit authorised. 86% of the authorised borrowing remains unutilized.
• Centre has decided to accede to the request and increase borrowing limits of States from 3% to 5%, for 2020-21 only. This will give States extra resources of ₹ 4.28 lakh crores.
• Reform linkage will be in four areas: universalisation of ‘One Nation One Ration card’, Ease of Doing Business, Power distribution and Urban local body revenues.

The first tranche of the economic package included measures for the MSME, NBFC, and tax. The second tranche of the economic package included measures for the migrant labours, farmers, and street vendors. The third tranch of the economic package mainly focussed in agriculture and allied activities. The fourth tranche of the economic package focussed in structural reforms of 8 sectors.