The Government’s Borrowing Limit Soared From 3% to 5%: Nirmala Sitharaman

Finance Minister Nirmala Sitharaman had updated on the main reforms of the MSME, livestock, defense, and aviation sectors during her last four press conferences.

The Union Minister for Finance and Corporate Affairs, Smt. Nirmala Sitharaman holding the 5th press conference to announce the details of special economic package, in New Delhi on May 17, 2020.

The final chunk of Rs 20 lakh crore stimulus package might be announced by finance Minister Nirmala Sitharaman. The Minister of Finance on Saturday said that the central government will implement innovation, accountability, and private investment in the coal sector and build Rs 50,000 crore infrastructure.

In accordance with the stimulus package for COVID-19, the Finance Minister announced on Thursday the One Nation One Ration Card, the free food grain for migrants, and the creation of affordable housing units in urban areas for migrant and poor people.

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On Sunday, the Center increased the country borrowing cap from 3% of the Gross National Product (GSDP) to 5% by 2020-21. A further Rs 4.28 lakh crore will be available.

However, part of the increased borrowing ceiling is connected with special reforms – the universalization of one country, aside from the steps recommended by a 15th Finance Commission – easy to implement and power distribution reforms.

Finance Minister Nirmala Sitharaman had focused on the main reforms of the MSME, livestock, defense, and aviation sectors during her last four press conferences.

Total government lending can increase by more than Rs 10 lakh crore and net lending by Rs 6,41 lakh crore by 2020-21, which is based on 3 per cent of GSDP.

Of the supplementary loans, the first 0.5% will be unconditional, and the next 1% is connected to simple, observable and achievable reform measures in four equal tranches. When milestones are reached in at least three of four areas of reform, the remaining 0.5% will be achieved.

Soon a certain scheme on the template will be told. “An increase in the states’ borrowing limit will help to absorb the expected plunge in their revenue receipts, and avoid a severe cutback in capital expenditure,” says Jayanta Roy, head of the ICRA. “The borrowing limit will not be reduced.

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On Saturday, Nirmala Sitharaman declared that the security FDI cap will be raised to 74%, up from 49%. The minister said that imports would be prohibited for certain weapons and platforms. Sitharaman said that these prohibited items can only be purchased in Germany.

It has been determined to provide the government with a boost in the security development field ‘Made in India.’

She added that the addition of separate budgetary provision to provide domestic capital procurement would be made to reduce enormous Defense Import Bills and the indigenisation of some imported spares.

She said the addition of corporateism is not privatization and that the Ordnance Factory Boards will be corporate for better management and finally list on the stock market.

Project Management Unit (PMU) to support contract administration should be set up for the time-bound acquisition process and quicker decision taking.

Nirmala Sitharaman declared on Friday, after publication of the third bundle, that the government is to amend the Critical Goods Act, six-and-a-half decades old, so that farmers may understand prices better.

The move will ensure the deregulation of foodstuffs such as cereals, edible oil, oily seeds, pulses, onion and potato, said the Minister.

On Wednesday Sitharaman said that the Government had plans to infuse Rs 50,000 Crore liquidity at 25% of current receipts, through the reduction in rates of TDS, for resident non-salaried, specified payments and tax collection at source (TCS). This is to provide the taxpayers with more funding. This decrease applies from tomorrow to 31 March 202, for the remainder of FY 2020-21.

In the second tranche of the Centre’s Rs 20 lakh fiscal stimulus plan to fight virus, it declared a range of opportunities for migrant employees, producers, market vendors and small traders, among others.