FM’s Nirmala Sitharaman fifth & final tranche announcements: Highlights

FM’s Nirmala Sitharaman fifth & final tranche announcements: Highlights


♦Seven steps in FM’s fifth & final tranche

  • Healthcare & education
  • Business during Covid
  • Decrimilisation of Companies Act
  • Ease of doing business
  • PSUs and policies
  • State govt and resources


  • In the fifth and final tranche of her economic package, Finance Minister Nirmala Sitharaman on Sunday announced that the government would allocate additional Rs 40,000 crore, over and above the budgeted Rs 61,000 crore, to the Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS) in order to generate more employment in the country.
  • Borrowing limit of states has been raised from 3 per cent of Gross State Domestic Product to 5 per cent in 2020-21, the finance minister said.

♦Health-related steps that have been undertaken

  • Rs 15,000 crore was released
  • Insurance cover of Rs 50 lakhs per person for health professionals
  • Made sure telemedicine comes into play
  • Capacity building exercises have been taken up
  • Epidemic Diseases Act was amended for protection of health care workers

♦Job security for farmers during monsoon

  • Budget estimate was Rs 61,000 crores
  • Additional Rs 40,000 crores allotted

♦Tech-driven education for all

  • PM e-Vidya programme fr multi-mode access
  • One nation one digital facility under DIKSHA for school education
  • One year-marked TV channel for every class
  • Extensive use of radio
  • Special e-content for Divyang children
  • Top 100 universities will automatically be allowed to start online courses by May 30, 2020

♦Big boost for struggling businesses

  • Debts related to Covid will be excluded from default under IBC
  • No fresh insolvency case will be initiated for up to a year
  • For MSMEs, a special insolvency framework will be notified
  • Minimum threshold for insolvency raised from Rs 1 lakh to Rs 1 crore

♦Government moves to decriminalise Companies Act defaults

  • 7 compoundable offences altogether dropped and 5 to be dealt with under alternative framework

♦Ease of Doing Business for Corporates

  • This will help companies to directly list their securities in foreign jurisdiction
  • Private companies which list non-convertible debentures on stock exchange not to be regarded as listed companies


♦New Public Sector Enterprise Policy introduced

  • All sectors to be now open for private players
  • List of strategic sectors requiring the presence of PSEs in public interest will be notified
  • In strategic sectors, at-least one enterprises will remain in the public sector but the private sector will also be allowed
  • In other sectors, PSEs will be privatised
  • To minimize wasteful administrative costs, the number of enterprises in strategic sectors will be between one to four, others will be privatised or merged or brought under holding companies.

♦State govt and resources

  • Centre has decided to increase borowing limit of states from 3% to 5% for FY21. This will give extra resources of Rs 4.28 lakh crore to states
  • Part of the borrowing will be linked to specific reforms

Reform linkage will be in four areas

  • One Nation One Ration Card
  • Ease of Doing Business
  • Power distribution
  • Urban local body revenues

A specific scheme will be notified by the Department of Expenditures

  • Unconditional increase of 0.50%
  • 1% in 4 tranches of 0.25% with each tranche linked to clearly specified, measurable and feasible reform actions
  • 0.5% of milestones are achieved in at least three out of four reform areas

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