NREGA outlay, cap on state borrowing hiked in fifth round
Concluding the government’s five-part policy reform and fiscal incentive package worth a total of ₹20,97,053 crore, finance minister Nirmala Sitharaman on Sunday announced a 66% jump in the allocated budget for the flagship rural job guarantee scheme; a substantial hike in the borrowing limit for states; a new plan that aims to end the monopoly of public sector enterprises (PSES) and open up sectors for private participation; and substantial ease of compliance for businesses, including relaxations in the insolvency and bankruptcy framework.
The fifth and the final tranche of announcements also included the creation of a robust public health infrastructure covering districts and blocks, launch of a digital education programme and an initiative for mental health and emotional well-being for students, teachers and families. The FM’S announcement is part of a slew of measures announced by the government for micro, small and medium enterprises (MSMES), agriculture, migrant workers, defence, businesses, and other segments. This followed Prime Minister Narendra Modi’s announcement of a ₹20 lakh crore package — amounting to 10% of the GDP — for the economy, to overcome the distress caused by the pandemic and the lockdown as well as to build a “self-reliant India”.
The FM said that the government has provided ₹11,02,650 crore stimulus in the five tranches. Earlier, stimulus worth ~9,94,403 crore was infused in the system through fiscal and policy measures that included ₹1.70 lakh crore relief package on May 26 and ₹8,01,603 crore monetary measures by the Reserve Bank of India (RBI) since March 27.
But experts have pointed out that the additional government spending as a part of the package is limited. DK Srivastava, chief policy adviser at consultancy firm EY India, said, “The final picture of central government’s
Covid-related stimulus package at the conclusion of the fifth tranche of finance minister’s announcement amounts to 9.8% of FY21 GDP.”