New Delhi: Finance Minister Nirmala Sitharaman on Sunday wound up her fifth episode of the Rs 20 lakh crore stimulus with announcement of another dose of reforms. But even as she did so, she admitted that what has been done thus far is not adequate, but the government has done whatever was possible.
She dropped enough hints that the government does not have the money to do any better, when asked about the fiscal burden of her packages on the Union budget.
"Obviously, we are borrowing as our revenues are stressed, but we are not splurging," she said, reminding a reporter during the media interface that the money is going to the right place. Asked why not put Rs 5,000 in cash in the hands of the needy to enable them to reboot their lives, Sitharaman said the government had examined all ideas and decided what was the best option.
A question on thousands of migrant walking to their home states with families in tow prompted her to hit back at the Congress for not telling its state governments to requisition as many as "Shramik" trains as were required.
Sitharaman cited her own calculations to claim she has fulfilled Prime Minister Modi's announcement of Rs 20 lakh crore economic stimulus to help out those hit by the corona pandemic and the lockdowns. In fact, as per her calculations, the entire booster dose comes to Rs 20,97,053 lakh crores.
The only tranche that has a monetary figure attached to it in Sunday's seven announcements was Rs 40,000 crore as additional grant for MGNREGA, besides Rs 51,000 crore provided in the budget to provide jobs to migrant workers returning home. All other announcements, however, are merely so-called reforms that were not quantified by the finance minister in terms of outgo of money.
She also conceded the demand of many chief ministers for more funds from the GST kitty by raising their borrowings from 3% to 5% of the gross collections but with a string attached -- that every 1% of it will be released on completion of central programmes.
These programmes could be one nation, one ration card, privatisation of the power discoms and hike in the income of urban local bodies. She said she was not putting any conditions but providing the incentive to the states to implement the programmes that will only help the poor people.
She said the Centre will release 0.5% of the GST component only when the state has implemented at least three of the four central programmes. Sitharaman said the Centre is financially stressed since no revenue has accrued in the past two months because of the corona epidemic; and, yet it is extending additional help of Rs 4.28 lakh crore to the states.
She also hinted that the states actually did not need this funding since they have not utilised 86% of the borrowings allowed by the RBI. None the less, she was advancing them 60% more and raising their overdraft limit from 32 to 50 days.
Here are the other reforms and policy changes she announced on Sunday without stating their financial implications:
• Ramp up of health infrastructure, to help rural masses in particular, by setting up infectious disease blocks in every district and public labs at the block level.
• Dissemination of education through PM's e-Vidya Diksha programme of "one nation, one Diksha" by earmarking one TV channel for each class. Also, the top 100 universities are to launch online classes by May 30 and immediate psychological support to children upset from being locked up for almost two months.
• Government will protect MSMEs and other industries from going bankrupt for one year and raise the minimum threshold from Rs 1 lakh to Rs 1 crore through an Ordinance.
• New PSE (public sector enterprise) policy to allow them to operate in pre-defined areas; will also allow least one PSE and not more than 4 PSEs to operate in any strategic sector. The policy also envisages privatisation or merger of the PSEs. The detailed policy will be out soon, the FM said.
• Drastic changes in the Companies Act for decriminalising most of the offences, dropping seven compoundable offences and increasing the number of offences to be settled through internal adjudication from 18 to 58 offences that will also help in de-clogging of the courts.
• The private companies will also get the freedom to list themselves in foreign destinations and they will be also allowed to list their nonconvertible debentures in the stock market without listing themselves.