WHATSOEVER DONE IS NOT ENOUGH, ADMITS FM GOVT HAS NO MONEY, IT'S BORROWING

KT NEWS SERVICE. Dated: 5/18/2020 12:00:04 AM

NEW DELHI, May 17: Finance Minister Nirmala Sitharaman on Sunday wound up her fifth and last tranche of the economic packages mostly with another dose of reforms, admitting that whatsoever done is not enough but the government has done whatever was possible.
She dropped enough hints that the government does not have money to do any better when asked about the burden of her packages on the budget. "Obviously we are borrowing as our revenue is stressed, but we are not splurging," she said, telling the reporter posing the question to better see whether the money is going to the right place.
Asked why not put Rs 5,000 in cash in the hands of the needy to restart their life, Sitharaman said the government has examined all ideas and decided what can be the best. A question on thousands of migrant workers still walking to their home states with families prompted her to hit back at the Congress for not telling its governments and its ruling allies to summon as many as "shramik" trains as required to clear the stranded instead of doing politics on the plight of the migrants.
Indirectly hitting at Rahul Gandhi sitting and talking with a group of migrant labourers at a flyover in Delhi on Saturday, she said he could have walked with them while talking and better if the Congress tells its chief ministers to call for more trains when the Railways have kept 1500 trains ready for reaching any district on a 3-hour call to take the stranded and provide them food and water on the trains.
Sitharaman gave her own mathematics to claim she has fulfilled Prime Minister Modi's announcement of Rs 20 lakh crore economic plan to help out those hit by the corona pandemic and the lockdowns, Rs 11.02 crore through a tranche of packages she unveiled in the past five days plus Rs 1.70 lakh crore declared at the start of the lockdown under the PM's Garib Kalyan Yojana an Rs 8.01 lakh crore extended by the Reserve Bank of India (RBI) to improve health of the bank borrowers. In her calculations, it comes to Rs 20,97,053 lakh crore.
The only tranche that has the monetary figure attached in Sunday's seven announcements is Rs 40,000 crore as additional grant for the MGNREGA, besides Rs 51,000 crore provided in the budget to provide jobs to the migrant workers returning home. All others are, however, reforms that were not quantified by the finance minister in terms of the outgo of money.
She also conceded demand of many chief ministers to the Prime Minister to get more funds from the GST to raise their borrowings from 3% to 5% of the gross GST collections but with a string attached that every 1% of it will be released on they complete the central programmes like "one nation, one ration card," privatisation of the power discoms and hike in the income of the urban local bodies. She said she is not putting any conditions but providing the incentive to the states to carry out the programmes that will only help their poor people. She said the Centre will release 0.5% of the GST part only when the state has implemented at least three of the four central progammes.
Sitharaman said the Centre is financially stressed since it got no revenue in the past two months because of the corona epidemic and yet it is extending this additional help of Rs 4.28 lakh crore to the states. Hinting that the states actually did not need this funding since they have not utilised 86% of the borrowings allowed by the RBI by advancing them 60% more and raising their overdraft limit from 32 to 50 days.
Here are other reforms and policy changes she announced on Sunday without stating their financial implications:
-- Ramp up of the health infrastructure, to help the rural masses in particular, for any future eventuality by setting up the infectious disease blocks in every district and public labs up to the block level. The health budget will be raised for this.
-- Promotion of education through PM's e-Vidya Diksha programme of "one nation, one Diksha" by earmarking one TV channel for each class and also using radio and community radio for education purposes. Also, top 100 universities are to launch the online classes by May 30 as already declared in the budget and immediate psychological support to children upset from being locked up for almost two months imbibing fear of corona virus.
-- To protect the MSMEs and other industries going bankrupt for one year and raising the minimum threshold from Rs 1 lakh to Rs 1 crore through an Ordinance.
-- New PSE (public sector enterprise) policy to allow the PSEs to operate in the pre-defined areas along with the private enterprises to ensure at least one PSE and not more than 4 PSEs operate in any strategic sector. The policy also envisages privatisation or merger of the PSEs. The detailed policy will be out soon, the FM said.
-- Drastic changes in the Companies Act for decriminalising most of the offences, dropping seven compoundable offences and increasing the number of offences to be settled through internal adjudication from 18 to 58 offences that will also help in de-clogging of the courts. The private companies will also get the liberty to list themselves in foreign destinations and they will be also allowed to list their non-convertible debentures in the stock market without listing themselves.

 

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