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Nirmala Sitharaman announces the second tranche of the economic relief package, Check the highlights of the speech here

The Prime Minister had announced during his address that the details of the COVID-19 special economic package would be announced by the Finance Minister Nirmala Sitharaman. The Finance Minister has taken the liberty to release the details of the package over the course of three to four days due to the expansive extent of the package and its impacts. The first announcement spoke of taxes and the benefits to the NBFCs and MSMEs.

“Agriculture and migrant workers sector”

She announced the second tranche of COVID stimulus of Rs 20 lakh crore aimed at the migrant workers, small farmers, street vendors, and affordable housing. The stimulus is aimed to provide relief to this segment of the population in the post lockdown period.

This relief package will provide 3 crore marginal farmers availed loans at concessional rates. These farmers had already benefited from Rs 4 lakh crore of loans given to them. The RBI moratorium has also benefited them.

She also announced that there will be an interest subvention and prompt repayment of incentive on crop loans, due from March 1, extended up to May 31, 2020. There will be 25 lakh new Kisan Credit Cards sanctioned with a loan limit of Rs 25,000 crore.

The central government has released Rs 11,002 crore in advance to states to augment the SDRF funds for helping states to set up shelters for migrant workers and provide them food.

“Self Help Groups”

She added that 12,000 SHGs at urban centres comprising urban poor have produced 3 crore masks and 1,20,000 litres of sanitizers. 7,200 new SHGs of urban poor have been formed during the period starting March 15, 2020, to help encourage production and steady income for these groups.

“Migrant workers”

For migrant workers who have returned to their homes, work would be made available through MGNREGS. Till May 13, 14.62 crore person-days of work will be generated. Work was offered to 2.33 crore wage seekers yesterday in 1.87 lakh gram panchayats.

Approximately 40-50% more workers were given work compared to May last year. States have been advised to provide them with work. Annual expenditure till date is Rs 10,000 crore. The average wage rate has risen to Rs 202 from Rs 192 in the last fiscal.

As part of the economic package, nine steps were announced where three were for migrant workers, one for MUDRA Shishu Loan, one for street vendors, one for housing, one for employment generation for tribals, and two related to small farmers.

“Free food for migrants”

For those migrants who don’t have NFSA cards or state cards, 5 Kgs of wheat or rice per person and one kg channa per family per month for the next two months to be provided and it will reach through the state governments. This will entail Rs 3,500 crore and is likely to benefit around 8 crore migrants.

“One Nation, One Ration Card”

National Portability Ration Cards can be used in any ration shops that will be applicable across the country. By August 2020, 67 cr beneficiaries in 23 states or 83% of all PDS beneficiaries will get covered. By March 2021, 100 per cent will be covered.

“Rental accommodation”

Under PM Awas Yojana, a scheme for rental housing for migrant workers. Under the scheme incentives will be offered to private manufacturing units and industrial units to develop affordable housing, converting government-funded houses into affordable
renting accommodations for migrant workers. Shall be done on PPP on a concessionaire basis. State government agencies will also be incentivized to develop affordable housing.

“MUDRA Shishu loan”

Those who have availed loans up to Rs 50,000, an interest subvention of 2% for the next 12 months after the moratorium period extended by RBI ends. Three crore people will get the benefit of Rs 1500 crore.

“Street Vendor”

Special scheme for street vendors to avail Rs 5,000 crore loan facility. Will be given Rs 10,000 of working capital.

“Affordable Housing”

Credit-linked subsidy scheme for middle-income households in the income group Rs 6-18 Lakh extended to March 2021. The CLSS scheme was operationalized from May 2017 and extended up to March 2020. Now, it has been extended until March 2021.

This will lead to investments of Rs 70,000 crore in housing and kickstart sectors like steel, cement, and create jobs.

“For Tribals”

Rs 6,000 cr worth of proposals has come from states under CAMPA funds. Tribal people will get employment in forest management, wildlife protection/management, and other forest-related activities.

“For Small/Marginal Farmers”

The government is extending Rs 30,000 crore additional capital emergency funds through NABARD for post-harvest Rabi and Kharif related activities for small and marginal farmers.

Under the PM Kisan Credit Card, Rs 2 lakh crore of concessional credit to boost farming activities and it will benefit 2.5 crore farmers. Those in animal husbandry and fisheries will also be included.

The Finance Minister will be announcing other details in the following days regarding the full details of allocation and use of the funds allotted under the package as well as RBI decisions and the existing packages.

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