The fifth tranche is the final installment of the economic package that was announced by PM Narendra Modi along with his Aatmanirbhar Bharat campaign. Here the key points from the last part of how the government has allocated Rs 20,000 lakh crores.
MNREGA
The government will allocate an additional Rs 40,000 crore over the amount of Rs 61,000 crore set aside in the annual budget. This is expected to generate 300 crore more person-days of work and address the need for work for the returning migrants.
Health and Education Sector
The government will be increasing public expenditure on health as more investments will be made at grassroots for health and wellness centres both at rural and urban levels. Infectious disease hospital blocks will be built in all districts. Additionally, public health labs will be set up at block levels.
As per the fifth tranche, the PM e-VIDYA program for multi-mode access to digital and online education will be immediately launched. FM added that there will be one earmarked TV channel for class 1-12, and the use of radio, community radio and podcasts, special e-content will be increased to aid the visually and hearing-impaired students. The top 100 universities of the country have been permitted to start online courses by May 30. Sitharaman also announced the launch of Manodarpan, an initiative to extend psycho-social support to students, teachers, and families for mental health and emotional well-being.
IBC
Debts related to COVID-19 shall be excluded from defaults under IBC. No fresh insolvency proceeding will be initiated for 1 year. The MCA has extended this by 6 months and the government intends to extend this by another 6 months. A special insolvency framework is going to be notified under section 240-A of the IBC for MSMEs. The minimum threshold to initiate the insolvency proceedings is raised to Rs 1 crore from the earlier Rs 1 lakh to insulate MSMEs.
Public Sector Enterprise Policy
FM Sitharaman said that India needs a policy wherein the private sector will be allowed to participate in all the sectors while the public sector enterprises will still continue to play a key role in the fifth tranche of the economic package. A new policy will be announced which will broadly categorise the strategic sectors and other sectors. Sitharaman said that in the strategic sectors, at least one public sector enterprise will be there however the private sector will also be allowed while in other sectors, the public sector enterprises will get privatised. The number of enterprises in the strategic sectors will generally be only one to four and others will be privatised/ merged/ brought under holding companies to minimise the administrative costs.
State Governments
On the matter of State Governments, the Finance Minister said in the fifth tranche, “Like the Centre, the state is also witnessing a sharp drop in revenues. Over Rs 46,038 crore were devolved as tax revenue to states. Over Rs 12,000 crore were also dispensed on time. The Health Ministry has also released over Rs 14,000 crore. The RBI in a very timely step has increased ways of advancing limits for states by 60%. The number of days a state can be in an overdraft situation in a quarter have been raised. While the borrowing ceiling of the states was increased, they have only borrowed 14% of the limit authorised to them; 86% remain unutilised as of now. We have now allowed them to borrow up to 5% of GSDP from the earlier 3%. This means, the states can now borrow an additional amount of Rs 4.28 lakh crore.
Part of the borrowing (by states) will be linked to specific reforms. From 0-3%, it will be unconditional. Up to 4.5%, it will be released in four tranches. The last 0.5% will be given as soon as the milestones are reached in at least three of the conditions.”
