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Cabinet approves 6.29-lakh crore relief package to boost Covid-hit economy

Union Ministers Prakash Javadekar and Ravi Shankar Prasad address a press briefing on Cabinet and CCEA decisions at National Media Centre in New Delhi. (PTI)Premium
Union Ministers Prakash Javadekar and Ravi Shankar Prasad address a press briefing on Cabinet and CCEA decisions at National Media Centre in New Delhi. (PTI)

  • As part of the package to support the pandemic-hit economy, FM Sitharaman had announced a slew of measures including 1.5 lakh cr of additional credit for small and medium businesses, more funds for the healthcare sector, loans to tourism agencies and guides

The Union Cabinet today approved the 6.29-lakh crore relief package announced by Finance Minister Nirmala Sitharaman to help the revival of the economy battered by Covid-19.

This was informed by Union Information and Broadcasting Minister Prakash Javadekar after the Cabinet meeting.

Addressing a press briefing, Union Minister Ravi Shankar Prasad said the Cabinet has approved a public-private partnership mode for the rollout of the BharatNet project for broadband services in villages in 16 states with viability gap funding of 19,041 crore.

Measures to boost Covid-hit sectors

As part of the package to support the pandemic-hit economy, Union Finance Minister Nirmala Sitharaman had announced a slew of measures including 1.5 lakh crore of additional credit for small and medium businesses, more funds for the healthcare sector, loans to tourism agencies and guides, and waiver of visa fee for foreign tourists.

"We are announcing about 8 economic relief measures, of which four are absolutely new and one is specific to health infrastructure," FM Sitharaman had informed.

Together with previously announced 93,869-crore spending on providing free foodgrains to the poor till November and additional 14,775 crore fertiliser subsidy, the stimulus package, which is mostly made up of government guarantee to banks and microfinance institutions for loans they extend to Covid-19-hit sectors, totalled up to 6.29 lakh crore.

The finance minister provided 23,220 crore of additional funding to set up children and paediatric care at hospitals to prepare healthcare infrastructure to deal with any emergency arising due to the Covid-19 wave hitting kids.

Further, to incentivise job creation, the government committed to paying the employer and employee's share to provident fund (PF) for all new recruitments done till March 2022. Previously, the government paid 902 crore for 21.42 lakh beneficiaries of 79,577 establishments.

With the tourism sector being hit hard by the pandemic, the minister had announced a financial support to over 11,000 registered tourists, guides, travel and tourism stakeholders, in addition to free one-month tourist visa to first five lakh tourists.

Other announcements included an additional 19,041 crore to provide broadband internet cover to all village panchayats, an extension of tenure of a production-linked incentive (PLI) scheme for large-scale electronics manufacturing by a year and 88,000 crore of insurance cover for goods exporters.

The central government has announced the support measures as states start lifting restrictions after new coronavirus infections showed a decline.

Two announcements made by the Finance Minister regarding the additional subsidy of 14,775 crore for DAP & P&K fertilizers, and extension of Pradhan Mantri Garib Kalyan Anna Yojana (PMGKAY) — free food grains from May to November 2021, were previously approved by the Union Cabinet.

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