Sakthivel sees latest package supporting goods and services exports
Dr A Sakthivel, the newly elected President of FIEO, welcomed the stimulus package of Rs.628,993 crore announced by Finance & Corporate Affairs Minister Nirmala Sitharaman to support Indian economy in fight against COVID-19 pandemic.
The package includes expansion of the scope of an emergency credit guarantee scheme, that offered relief to a large number of MSMEs, from Rs.3 trillion to Rs.4.5 trillion and guarantees to banks for their loans to micro lenders for lending up to Rs.1.25 lakh per person. These will further help in increasing liquidity for micro and small businesses across the country, Dr Sakthivel said on 28 June 2021 as the Minister announced the package.
He applauded yet another initiative to give a boost to the exports sector by the Finance Minister. This is the announcement of Rs.33,000 crore for ‘Project Exports’ through National Export Insurance Account (NEIA).
This will facilitate both goods and services exports as many economies are opening up. This will also boost large investment to propel exports from India.
Further Rs.88,000 crore boost to Export Insurance Cover through Export Credit Guarantee Corporation (ECGC) will address the rising credit risks, during and aftermath of the pandemic, thereby providing relief to the exporters in terms of liquidity, reiterated Dr Sakthivel.
Sitharaman announced on 28 June 2021 a slew of measures, including Rs.1.1 lakh crore credit guarantee scheme for improving health infrastructure, and enhancing the limit under the ECLGS by 50% to Rs.4.5 lakh crore for the MSME sector facing liquidity crunch.
She shared details of stimulus package comprising eight relief measures and other eight measures to support the economic growth.
These are:
Rs.1.1 lakh crore loan guarantee scheme for COVID-affected sectors, including health sector, which includes guarantee cover for expansion or for new projects.
Additional Rs.1.5 lakh crore limit enhancement done for Emergency Credit Line Guarantee Scheme (ECLGS) scheme. The existing limit for ECLGS scheme, announced as part of Rs.20 lakh crore Atmanirbhar Bharat Abiyan package in May 2020, was Rs.3 lakh crore.
Last month, the finance ministry expanded the scope of the Rs.3 lakh crore ECLGS by including concessional loans to hospitals for setting up on-site oxygen generation plants.
Besides, the validity of the scheme was extended by three months to 30 September and or till guarantees for an amount of Rs.3 lakh crore are issued.
The last date of disbursement under the scheme has been extended to 31 December 2021.
Under the ECLGS 4.0, 100% guarantee cover was given to loans up to Rs.2 crore to hospitals, nursing homes, clinics, medical colleges for setting up on-site oxygen generation plants.
Digital India: Rs.19,041 crore for Broadband to each Village through BharatNet PPP Model
Out of 250,000 Gram Panchayats, 156,223 Gram Panchayats have been made service ready by 31 May 2021. It is proposed to implement BharatNet in PPP model in 16 States (bundled into 9 packages) on viability gap funding basis. For this, an additional Rs.19,041 crore will be provided. Thus, total outlay under BharatNet will be enhanced to Rs.61,109 crore. This will enable expansion and upgradation of BharatNet to cover all Gram Panchayats and inhabited villages.
Extension of Tenure of PLI Scheme for Large Scale Electronics Manufacturing
PLI scheme provides incentive of 6% to 4% on incremental sales of goods under target segments that are manufactured in India, for a period of five years. Incentives are applicable from 1 August 2020 with base year as 2019-20.
However, the companies have been unable to achieve incremental sales condition due to disruption in production activities due to pandemic related lockdowns; restrictions on movement of personnel; delay in installation of relocated plant and machinery; and disruption in supply chain of components. Therefore, it has been decided to extend the tenure of the scheme launched in 2020-21 by one year i.e. till 2025-26. Participating companies will get option of choosing any five years for meeting their production targets under the scheme. Investments made in 2020-21 will continue to be counted as eligible investments.
Rs.3.03 lakh crore for Reform-Based Result-Linked Power Distribution Scheme
Revamped Reforms-Based, Result-Linked power distribution scheme of financial assistance to DISCOMS for infrastructure creation, up-gradation of system, capacity building and process improvement was announced in the Union Budget of 2021-22. It aims at state specific intervention in place of “one size fits all”.
Participation in the scheme is contingent to pre-qualification criteria like publication of audited financial reports, upfront liquidation of State Government’s dues/subsidy to DISCOMS and non-creation of additional regulatory assets. Under the scheme, it is aimed to provide assistance for installation of 25 crore smart meters, 10,000 feeders, 4 lakh km of LT overhead lines.
Ongoing works of IPDS, DDUGJY and SAUBHAGYA will also be merged in the scheme. Total outlay for the scheme is Rs.303,058 crore, out of which the Central Government’s share will be Rs.97,631 crore. The amount available under the scheme is in addition to the allowed additional borrowing of 0.5% of Gross State Domestic Product which will be available to the States annually for the next four years subject to carrying out specified power sector reforms. The amount of borrowings available this year for this purpose is Rs.105,864 crore.
New streamlined process for PPP Projects and Asset Monetization
Current process for approval of Public Private Partnership (PPP) projects is long and involves multiple levels of approval. A new policy will be formulated for appraisal and approval of PPP proposals and monetization of core infrastructure assets, including through InvITs. The policy will aim to ensure speedy clearance of projects to facilitate private sector’s efficiencies in financing construction and management of infrastructure. #economy #banking #investment /fiinews.com
