Union Budget 2022

Nirmala Sitharaman Announces Relief Package of Rs 6,28,993 Crore to Support Indian Economy, Industry Lauds Move

Union minister of finance Nirmala Sitharam announces relief package of Rs 6,28,993 crore to support Indian economy in the fight against the COVID-19 pandemic

Nirmala Sitharam, union minister of finance, announced a slew of measures to help the sectors hit by the second wave of the COVID-19 pandemic. A relief package of Rs 6,28,993 crore has been set aside to support the Indian economy and help t revive from the devastating impacts of the pandemic. Prime minister Narendra Modi said that the measures announced will help small entrepreneurs and self-employed persons to sustain their business activities and expand them further.

“The measures will help to stimulate economic activities, boost production and exports, and generate employment. Result linked Power Distribution Scheme and streamlined processes for PPP projects and Asset Monetisation demonstrates our Government’s continuing commitment to reforms,” he said. The finance minister said that the reforms announced were for the New India of the 21st century.

Measures Announced by Nirmala Sitharaman

The main reforms announced to help industries battle the COVID-19 pandemic are as follows:

  • Rs 1.1 lakh crore loan guarantee scheme has been announced for COVID-19 affected sectors.
  • An additional Rs 1.5 lakh crore for Emergency Credit Line Guarantee Scheme will also be offered.
  • Credit Guarantee Scheme will facilitate loans to 25 lakh persons through Micro Finance Institutions (MFIs).
  • Financial support is being offered to more than 11,000 registered tourists, guides, travel and tourism stakeholders, and free one month tourist visa will be provided to first 5 lakh tourists.
  • AatmaNirbhar Bharat Rozgar Yojana will be extended to 31 March 2022.
  • Rs 23,220 crore has been announced for public health with emphasis on children and paediatric care or paediatric beds.
  • Rs 19,041 crore has been announced for broadband to each village through BharatNet PPP Model.
  • The tenure of PLI scheme for large scale electronics manufacturing has been extended till 2025 to 2026.
  • Rs 3.03 lakh crore for reform-based result-linked power distribution scheme.
  • New streamlined process for PPP projects and asset monetization.

Snapshot of financial details of the schemes announced is as follows:

Economic relief from COVID-19 pandemic: Rs 3,76,244 Crore.

New scheme for public health: Rs 15,000 Crore.

Impetus for growth and employment: Rs 2,37,749 Crore.

Industry Reactions to Announcements Made by Nirmala Sitharaman

The industry has largely appreciated the reforms announced by the finance minister. Shachindra Nath, executive chairman and managing director, U GRO Capital, appreciated the measure announced on the Emergency Credit Line Guarantee Scheme. “The Finance Minister today has announced the much-needed relief measures, for multiple affected sectors. Considering the fact that almost 90% of the Emergency Credit Line Guarantee Scheme (ECLGS) outlay was effectively utilized to support the affected MSME sector, an additional Rs 1.5 lakh crore will greatly catalyze the revival as well as growth processes of the MSMEs. This announcement came at a significant moment, as World MSME day was celebrated a day prior. Further, the credit guarantee scheme for 25 Lakh individuals through the micro-finance institutions and the financial measures announced for the tourism sector are much appreciated. With the economy carefully opening up in stages, the announced measures will certainly prove viable for the MSMEs and individuals towards their efforts to overhaul the broken cash-flows,” he said.

A Gururaj, managing director, Optiemus Electronics Limited says that the government’s move to extend the tenure of the PLI scheme is well appreciated. “We are grateful to the government for having considered the industry’s request in view of some of the problems faced due to the pandemic,” he commented. Rupinder Malik, partner, J Sagar Associates said that the announcement made by the finance minister on extending Aatmanirbhar Bharat Rozgar Yojana was needed to save jobs. “In my view, extending the scheme is helpful as it may prevent job losses in low income labour intensive industries. Private companies will be incentivized to maintain the number of employees on their rolls to continue receiving provident fund contribution subsidy,” commented Malik.

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