Eco stimulus package includes Rs 8 lakh cr liquidity measures by RBI: FM

PTI

FM Nirmala Sitharaman addressing fifth tranche of press conference of Aatma Nirbhar Economy  Package (Twitter image)

FM Nirmala Sitharaman addressing fifth tranche of press conference of Aatma Nirbhar Economy Package (Twitter image)

Finance Minister Nirmala Sitharaman on Sunday said the Rs 20 lakh crore economic stimulus package to deal with the fallout of COVID-19 includes Rs 8.01 lakh crore of liquidity measures announced by the Reserve Bank since March.

The stimulus totals to Rs 20.97 lakh crore, she said, adding this also comprises the Rs 1.92 lakh crore package of free foodgrain and cooking gas to poor and cash to some sections announced in March.

The five part stimulus package announced beginning May 13 comprised Rs 5.94 lakh crore in the first tranche that provided credit line to small businesses and support to shadow banks and electricity distribution companies.

The second tranche included free foodgrain to stranded migrant workers for two months and credit to farmers, totalling Rs 3.10 lakh crore.

Spending on agri infrastructure and other measures for agriculture and allied sectors in the third tranche totalled to Rs 1.5 lakh crore.

The fourth and fifth tranches that dealt mostly with structural reforms totalled to Rs 48,100 crore, she said.

Finance Minister said a new “coherent” public sector enterprises policy will be formulated that will define strategic sectors which will have not more than four PSUs.

List of strategic sectors requiring presence of public sector undertakings (PSUs) in public interest will be notified, she said while announcing her fifth and final economic stimulus package.

In strategic sectors, at least one enterprise will remain in the public sector but private sector will also be allowed.

In other sectors, PSUs will be privatised.

“To minise wasteful administrative costs, number of enterprises in strategic sectors will ordinarily be only one to four; others will be privatised/merged/brought under holding companies,” she said.

In a bid to give relief to companies defaulting on loans due to the COVID-19 stress, Nirmala Sitharaman on Sunday said no fresh insolvency will be initiated for one year under the Insolvency and Bankruptcy Code.

Also, coronavirus-related debt will be excluded from definition of default, she said.

Minimum threshold to initiative insolvency proceeding has been raised to Rs 1 crore from Rs 1 lakh to benefit MSMEs, she said adding that an Ordinance will be promulgated to bring this change in IBC.

She also announced decriminalisation of the Companies Act in violations involving minor technical and procedural defaults including shortcoming in CSR reporting, inadequacies in board report, filing defaults and delay in holding AGM.

Majority of the compoundable offences sections will be shifted to internal adjudication mechanism (IAM), she said adding that amendments will be brought through an Ordinance and will de-clog the criminal courts and NCLT.

Seven compoundable offences under the Companies Act altogether dropped and five to be dealt with under alternative framework, the finance minister said.

Also, the government allowed companies to directly list securities in permissible foreign jurisdictions.

Private companies, which list non-convertible debentures on stock exchanges, would not to be regarded as listed companies, she added.