Nirmala Sitharaman Highlights: While there is a countrywide lockdown amid coronavirus scare, businesses across states are going through a rough phase.Nirmala Sitharaman Highlights: Finance Minister Nirmala Sitharaman has announced a slew of economic measures to support people to survive through coronavirus scare. The Finance Ministry said that under PM Kisan Samman Nidhi, Rs 2000 will be immediately front-leaded in the account of 8.7 crores farmers. FM Sitharaman has announced free of cost 5 kg rice or wheat, and 1 kg pulse under PM Garib Kalyan Package, while LPG cylinders will also be given free of cost to the beneficiaries of Ujjwala Yojana for the next three months. The minister also said that the announcements will come into effect immediately as, at this point, it is only focussing on reaching out to the people in need. While the government announced 20 crore woman Jan Dhan account holders to get an ex-gratia amount of Rs 500 per month for the next three months, it also doubled collateral-free loans to Rs 20 lakhs for Self Help Group women, helping 7 crore women. In other major announcements, an amendment to PF regulation, relief for construction workers, etc were included.
In the previous press conference, FM Sitharaman announced an extension of the deadline to file I-T, and GST returns, and that of Sabka Vishwas scheme to reduce the regulatory burden on businesses. Meanwhile, State Bank of India, Indian Bank, Uco Bank, Bank of India (BOI), and Union Bank of India (UBI), have announced emergency credit lines for quick loans.
Highlights
The most useful measure at this moment will be free supplies through PDS. Cash transfers will also help, but access to bank accounts may be limited due to non-availability of transport and also migration. An increase in MNREGA wages will not have an immediate impact when all people are stationed indoors. However, when the crisis is over, this will play a crucial role given the widespread job loss that is bound to happen in the immediate aftermath. One large chunk of population that need support critically are migrant workers. While using the welfare fund for building and other construction workers is a welcome step, a more robust mechanism is required to reach them.- Partha Chatterjee, Dean - International Partnerships, Professor and Head of the Economics Department, Shiv Nadar University.
Most of the groups which have been identified for additional monetary disbursements essentially represent the unorganized sector workforce. In the absence of a ready database on the workforce in the unorganized sector, this is an indirect way to target intended beneficiaries leveraging the existing Direct Benefit Transfer channels to enable better targeting of beneficiaries. - Arindam Guha, Partner, Leader - Government and Public Services, Deloitte India
The Government announcements aim to ensuring that no one goes to bed hungry. The direct transfers will provide the necessary support in these tough times. The Government has already relaxed the deadlines for compliances. The relief in EPF will reduce financial stress. The industry was expecting a relief package however, it seems that the Government is focused on masses need right now, and relief and relaxations for business will be announced in due course. The Government deserves a round of applause for the 50 lakhs medical insurance to the health workers. In nut shell, the announcements bring some relief to the masses. - CA Anuj Kakkar, Partner, Vriddhi Advisors.
"We now expect the impact of social distancing and the lockdowns to limit GDP growth to 2.4% in Q4 FY2020 and a marginal 0.5% in Q1 FY2021, despite the support from agriculture and government spending. As a result, we expect the annual GDP growth to ease from 4.4% in FY2020 to 4.2% in FY2021," said Aditi Nayar, Principal Economist, ICRA.
The announcements made by the FM to provide relief during these unprecedented times are welcome, especially the provision of additional food, which will ensure food security, free LPG, and the upfronting of various payments, such as the PM Kisan and pension entitlements. - Aditi Nayar, Principal Economist, ICRA.
"Through today’s announcements, the Government has made provisions to ensure that families belonging to poor and lower to middle income are able to carry out their daily lives smoothly. However, we await c, startups, etc. The move to lockdown is well acclaimed, the measures announced today are timely and appropriate. We anticipate the rest of the economic packages and hope they are designed to overcome the disruptions in the rest of society". - Jaspal Bindra, Executive Chairman, Centrum Group.
SEBI has decided to give certain further relaxations from compliance to listed companies under SEBI (Listing obligations and disclosure requirements) and from SOP on the imposition of fines and other enforcement actions. - Nirmala Sitharaman Office
'The Rs 1.7 lakh crore package announced today prevents any possible retrenchment of workers as GOI is contributing the full 24% to the PF authorities and stepping in with foodgrains prevents any kind of hoarding by middlemen. The DBT route ensures that the amount quickly reaches the people who need it the most.' - Ranganathan, Research Head, LKP Securities.
"FM’s announcements are focused mostly on rural poor. Positive for consumers as a theme but mostly low-priced products. Rs1.7 lakh crore is about 0.8% of GDP. The collapse of demand, as was being feared by many, looks unlikely. So the period of lockdown may not be extended. These measures, if effectively and quickly implemented, would make the total shutdown more complete. This is the biggest positive for listed companies," said Sujan Hajra, Chief Economist and Executive Director, Anand Rathi Shares & Stock Brokers.
'Comprehensive package for the poor and vulnerable. The focus is ' nobody should go hungry. ' No announcements for stimulating the economy. Perhaps later. This is a package for lockdown impacted segments. Regarding relief to MSMEs etc, the FM said: ' we will look into it.' So industry-specific measures likely to be announced in the next package. The govt is prioritising. This can go a long way in implementing the lockdown. A deficiency is that the states who have to implement lots of measures have not been given any significant transfer.' - V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services.
The first installment of Rs 2,000 under PM Kisan Samman Nidhi will be front-loaded, giving immediate benefit to 8.69 crore farmers. - FinMin
In addition to the 5 kg of wheat or rice, each person to get additional 5 kg of wheat / rice per person for free for next three months; additional 1 kg of pulses to be given for each household so that no poor person goes hungry - FM Sitharaman
"The PF scheme regulations will be amended because of the pandemic situation to allow the non-refundable advance of 75% of the amount standing credit to the user or 3 months wages, whichever is lower. This will benefit 4.8 crore workers." - Finance Ministry
Rs 31,000 crore is available in the Building and other Construction Workers' Fund (BOCW). These can be used for 3.5 crore construction workers. The govt has suggested State govts to utilise this for the welfare of these workers: Nirmala Sitharaman
"Indian version of helicopter Money- Welcome stimulus targeted at the bottom of the pyramid. However, support to Jan Dhan account holders could have been extended to all account holders instead of restricting it to women account holders only" Hari Hara Mishra, a policy commentator, told Financial Express Online.
The Finance Minister said that the government is studying the problems being faced by other sectors. The Rs 1.7 lakh crore package announced today was to address the needs of the poor who needed immediate relief, the Finance Minister said.
On a question related to fiscal deficit and market borrowings, FM Sitharaman said that at this stage, we are more concerned about reaching out to people who need help.
FM Sitharaman said that today's announcements will be rolled out immediately.
The Finance Minister announced that women self help groups can now avail collateral free loans up to Rs 20 lakh. Earlier the limit used to Rs 10 lakh.
Government asks state governments to utilise the district mineral fund healthcare facility amid coronavirus scare.
Centre asks states to utilise Rs 31,000 crore fund to benefit construction workers to benefit 3.5 crore such workers.
Finance Minister Nirmala Sitharaman has come up with a Rs 1.7 lakh crore relief package for the daily wage earners, women workers and migrant workers as the country remains in a 21-day lockdown period.
Government will contribute 12% from the employer side and 12% from the employee side to PF accounts. This for those firms where there are less than 100 employees, 90% of who draw less than 15,000 per month in wages.
Due to Covid-19 pandemic, EPFO schemes regulation will be amended to allow the non-refundable advance of 75% of the standing amount or three month wages, whicever is lower. This will benefit 4.8 crore workers.
The government will pay the EPF contribution, both of the employer and employee, ie. 24% for the next three months. This is for all those establishments which have upto 100 employees, out of which 90% employees draw less than Rs 15,000 per month
In the PM Garib Kalyan Yojna the Finance Minister announced that Ujjwala beneficiaries will get fre gas cylinders for thee months.
Collateral free loans doubled to Rs 20 lakhs for Self Help Group women, to help 7 crore women.
To provide an adequate supply of cooking gas, for the next three months 8.3 crore BPL family will get free cylinders.
20 crore woman Jan Dhan account holders will get an ex-gratia amount of Rs 500 per month for the next three months, to fight coronavirus.
Senior citizens, widows, and Divyangs to get one-time additional payment of Rs 1000 in two installments for the next three months. This is expected to benefit 3 crore such people under Direct Benefit Transfer.
"We have come with a package that will immediately help those affected directly, those migrants workers, urban and rural poor. We are looking both at cash transfers as well as food security measures," Sitharaman said.
FM announces immediate release of Rs 2000 to directly benefit 8.69 crore farmers.
Under Pradhanmantri Garib Kalyan Yojana, 5 kg rice or wheat will be given for free for the next three months. Besides, 1 kg pulse available regionally will also be given for free to 80 crore people.
For the next three months an addition 5KG of rice or wheat will be given free by the government ot the poor.
We are fighting this emergecy on a war footing, said MoS Finance, Anurag Thakur while he uinveiled a Rs 50 lakh per person insurance for medical personnel.
FM Sitharaman has announced Rs 50 lakh medical cover per person for the government's sanitation workers, ASHA workers, doctors, paramedics, others, if they need it. The scheme is to benefit 20 lakh such workers.
We do not want people to stay hungry or without money in their hand, said FM Sitharaman
FM Sitharaman starts press conference
In the case of construction workers, the centre can issue advisories to states to disburse funds from their respective labour welfare boards for those in the unorganised sector, like beedi, mine, cine workers.