Finance Minister Nirmala Sitharaman announces over ₹1 trillion loan guarantee scheme for COVID-19 affected sectors such as healthcare
- As a third wave of
COVID-19is expected by many, India’s Finance Minister announces a series of relief packages.
- A loan guarantee scheme of ₹1 trillion for COVID-19 affected sectors like
- Dedicates ₹50,000 crore to
healthcare sectorand remaining ₹60,000 crore to other affected sectors.
To start with,
It announced an additional ₹1.5 trillion to the Emergency Credit Line Guarantee Scheme (ECLGS). This scheme is aimed to provide 100% guaranteed coverage to the banks, non-banking financial companies (NBFCs) and other lending institutions for extending emergency credit to micro, small and medium enterprises (MSMEs) and business entities that have suffered due to the COVID-19 pandemic and are struggling to meet their working capital requirements.
Further, it has launched a credit guarantee scheme wherein micro finance institutions (MFIs) will facilitate loans to 25 lakh small borrowers for a tenure of three years. All borrowers including defaulters upto 89 days will be eligible. Most importantly, the government will back scheduled commercial banks for providing loans to NBFCs-MFIs.
For badly affected sectors like tourism, the government has initiated a revival plan. It has announced plans to extend financial support to 11,000 registered tourist guides. According to Sitharaman, working capital will be provided to people in the tourism sector to kickstart businesses impacted due to the pandemic.
Moving on, Sitharaman announced free tourist visas to the first 5 lakh tourists coming into India. The scheme will be applicable till March 31, 2022 or till 5 lakh visas are issued.
Here are other key highlights from the Finance Minister’s press conference:
- The EPF support to employers and employees under Atma Nirbhar Bharat Rozgar Yojana has been extended till March 31, 2022. The government incentivises employers by contributing employers’ and employees' share payable into Employees’ Provident Fund Organisation (EPFO) scheme. This encourages employers from various sectors to hire more workers
- Also, the government has extended Pradhan Mantri Gareeb Kalyan Anna Yojana (PMGKAY) scheme till November 2021, wherein it distributes food grains free of cost. The scheme was started in March 2020.
- On increasing fears of an impending third wave to affect children, Sitharaman announced a new scheme focused on availability of paediatric care/paediatric beds in the short term.
- North Eastern Regional Agricultural Marketing Corporation (NERAMAC) will be provided with a relief package of ₹77.45 crore for financial restructuring and infusion of funds. The aim is to enhance agricultural procurement and marketing facilities in the northeast of India.
- To boost digitisation among gram panchayats, the government is said to provide an additional ₹19,041 crore for BharatNet. The idea is to enable broadband connectivity to all inhabited villages.
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