Finance Minister Nirmala Sitharaman announced an additional allocation of Rs 40,000 crore under Mahatma Gandhi National Rural Employment Guarantee Act (MGNREA). According to Care Ratings, an increase in MGNREA outlay will cover 2 crore of migrants.
The rating agency stated this outlay will cover 2 crore of migrants who can take 100 days employment provided there are projects. This outlay is in addition to Rs 61,000 crore already announced in the Budget.
Yet another announcement that is opening up public sector would mean the private sector can get into public sector territory like railways, atomic energy etc. Another relief for businesses is decriminalisation even if they missed any compliance. According to the rating agency, it will allow corporates to breathe easily to an extent.
Potentially, there can be Rs 4.28 lakh crore of borrowing by states which is equivalent to the higher borrowing of the centre already announced, stated Care Ratings. This means if both centre and states go at this target, the combined fiscal deficit can be in the region of 11-12 per cent.
According to the analysis by the agency, it stated the break-up of the Rs 20 lakh crore shows that the RBI has a share of Rs 8 lakh crore while another Rs 1.9 lakh crore was announced earlier before this grand package. "Hence, these five tranches provide for Rs 10 lakh crore. The actual outflow from the Budget is not clear. It looks like that there could be Rs 75,000 -80000 crore which could go immediately while the tranche three packages of Rs 1.5 lakh crore would be provided for over a period of time and not immediately as the targets are fairly long term.