Union Minister of Finance & Corporate Affairs Nirmala Sitharaman announced the fifth and last tranche of measures towards government reforms and enablers as part of Atmanirbhar Bharat Abhiyan on 17 May 2020.
The Finance Minister detailed seven measures for providing employment, support to businesses, ease of doing business, and state governments as well sectors such as education and health.
The government will now allocate an additional Rs 40,000 crore under Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS). It will help generate nearly 300 crore person days in total addressing need for more work, including returning migrant workers in monsoon season as well. Creation of larger number of durable and livelihood assets, including water conservation will boost the rural economy through higher production.
Public Expenditure on Health will be increased by investing in grass root health institutions and ramping up Health and Wellness Centres in rural and urban areas. Infectious Diseases Hospital Blocks will be set up in all districts and strengthening of lab network and surveillance by Integrated Public Health Labs in all districts and block level labs and Public Health Units to manage pandemics. Further, the National Institutional Platform for One Health by the Indian Council of Medical Research (ICMR) will encourage research. The Centre will enable implementation of National Digital Health Blueprint under the National Digital Health Mission.
PM eVIDYA, a programme for multi-mode access to digital/online education, will be launched immediately. Manodarpan, an initiative for psycho-social support for students, teachers and families for mental health and emotional wellbeing will be launched immediately as well. A New National Curriculum and Pedagogical framework for school, early childhood and teachers will also be launched. A National Foundational Literacy and Numeracy Mission for ensuring that every child attains learning levels and outcomes in Grade 5 by 2025 will be launched by December 2020.
In order to further enhance the ease of doing business, the government has proposed some Insolvency and Bankruptcy Code (IBC) related measures. Minimum threshold to initiate insolvency proceedings has been raised to Rs one crore (from Rs one lakh, which largely insulates MSMEs). A special insolvency resolution framework for MSMEs under Section 240A of the Code will be notified soon.
The Centre announced suspension of fresh initiation of insolvency proceedings up to one year, depending upon the pandemic situation. Empowering the Central government to exclude COVID-19 related debt from the definition of ‘default’ under the Code for the purpose of triggering insolvency proceedings.
The Finance Ministry has Decriminalised Companies Act violations involving minor technical and procedural defaults such as shortcomings in corporate social responsibility (CSR) reporting, inadequacies in Board report, filing defaults, delay in holding of annual general meeting (AGM). The amendments will de-clog criminal courts and the National Company Law Tribunal (NCLT). Seven compoundable offences altogether dropped and five to be dealt with under alternative framework.
The Centre laid some of the following key reforms as part of ease of doing business for corporates:
• Direct listing of securities by Indian public companies in permissible foreign jurisdictions.
• Private companies which list NCDs on stock exchanges not to be regarded as listed companies.
• Including the provisions of Part IXA (Producer Companies) of Companies Act, 1956 in Companies Act, 2013.
• Power to create additional/specialised benches for NCLAT.
• Lower penalties for all defaults for Small Companies, One-person Companies, Producer Companies & Start Ups.
The Centre will announce a new policy whereby a list of strategic sectors requiring presence of Private Sector Enterprises (PSEs) in public interest will be notified; in strategic sectors, at least one enterprise will remain in the public sector but private sector will also be allowed; in other sectors, PSEs will be privatised (timing to be based on feasibility, etc.)
In order to minimise wasteful administrative costs, a number of enterprises in strategic sectors will ordinarily be only one to four; others will be privatised/ merged/brought under holding companies.
The Centre has decided to increase borrowing limits of states from three percent to five percent for 2020-21 only. This will give states extra resources of Rs 4.28 lakh crore. A part of the borrowing will be linked to specific reforms (including recommendations of the Finance Commission). Reform linkage will be in four areas — universalisation of ‘One Nation One Ration Card’, Ease of Doing Business, Power Distribution and Urban Local Body Revenues.
A specific scheme will be notified by the Department of Expenditure on the following pattern: Unconditional increase of 0.50 percent, one percent in four tranches of 0.25 percent, with each tranche linked to clearly specified, measurable and feasible reform actions, further 0.50 percent if milestones are achieved in at least three out of four reform areas.