FM Nirmala Sitharaman unveils Covid-19 relief package

The announcement included a new loan guarantee scheme of Rs 1.10 lakh crore for Covid-affected sectors, including health and tourism

The Centre on Monday announced a 50% expansion in the emergency loan scheme for small and medium businesses to Rs 4.5 lakh crore and extended further support to healthcare and tourism sectors to help the country recover from the second wave of Covid-19.

Besides the government guarantee for emergency credit to smaller companies, Monday’s announcement included a new loan guarantee scheme of Rs 1.10 lakh crore for Covid-affected sectors, including health and tourism. Of this, Rs 50,000 crore went to the health sector alone.

The package, which the finance ministry said was worth Rs 6.29 lakh crore, included both old and new schemes and to a large extent made up of state guarantee on bank loans.

“The health sector spend is aimed at upscaling medical infrastructure targeting underserved areas,” Finance Minister Nirmala Sitharaman said, adding a completely new scheme to benefit the smallest of the borrowers was also being unveiled to help at least 25 lakh loan seekers at lower interest rates.

Read more: FM announces stimulus package for economic revival; raises ECLGS scheme limit to Rs 4.5 lakh cr

Other than that, she said the Centre will waive visa fees for five lakh foreign tourists once the visa issuance for international travel resumes. The total financial implication of this will be Rs 100 crore.

She announced up to Rs 10 lakh loans to tourist agencies and Rs 1 lakh loan to tourist guides.

The government also extended the Atmanirbhar Bharat Rozgar Yojana, which was launched in October last year to encourage employment generation, by nine months till March 31, 2022. Around 21.42 lakh people have benefited from the scheme till June 18, 2021, with a total outgo of Rs 902 crore. The beneficiaries are spread around 79,577 establishments.

The package also included a previously announced Rs 94,000 crore on free foodgrains to the poor till November and additional Rs 15,000 crore fertiliser subsidy.

Economists said the fresh fiscal outgo on the schemes announced today will be around Rs 0.6 lakh crore.

“Setting aside the guarantee schemes and the announcements that had already been made prior to today, the step-up in the fiscal outgo within FY2022 based on the fresh announcements is estimated at around Rs. 0.6 trillion,” Aditi Nayar, Chief Economist at ICRA said.

The Opposition Congress reacted by saying the finance minister has only delivered the headline and that there was hardly anything new in the scheme.

“Credit guarantee schemes have not guaranteed revival since India’s economic downturn. FM @nsitharaman needs to realise that doing the same thing over and over again delivers headlines but little else,” senior Congress leader Jairam Ramesh said.

An additional Rs 19,041 crore for providing broadband Internet cover to all village panchayats, an extension of tenure of production-linked incentive (PLI) scheme for large scale electronics manufacturing by a year and Rs 88,000 crore of insurance cover for goods exporters were also announced.