Aatmanirbhar Bharat Abhiyan – Part 5 (Highlights)

In continuation to the earlier announcements, the Hon’ble Union Finance Minister Nirmala Sitharaman made the fifth and last tranche of Aatmanirbhar Bharat Abhiyan (ABA) on 17 May 2020. The FM explained that various steps have been taken in the health sector, ease of doing business and online education during the COVID-19 pandemic. The last tranche of measures covers seven areas such as MNREGA, health reforms and initiatives, businesses, decriminalisation of the Companies Act defaults, ease of doing business, Public Sector Enterprises (PSE), and support to state governments.

1. MNREGA: An additional allocation of Rs 40,000 crore to boost employment under MNREGA. This will generate 300 crore person-days and also boost the rural economy through higher production.

2. Health Reforms and Initiatives: Planning to increase investment in public health. Also, to prepare India for a future pandemic by creating infectious disease hospital blocks in all district, encouraging research and implementing digital health mission.

3. Technology-Driven Education: For implementing technology-driven education post-COVID-19, PM e-VIDYA (multi-mode access to digital/online education), Manodarpan (to ensure mental health and emotional well-being) and other schemes will be launched.

4. Business: For enhancing business through Insolvency Bankruptcy Code (IBC) measures such as:

• The threshold limit raised to Rs 1 crore from Rs 1 lakh for initiating insolvency proceedings.
• Special insolvency resolution framework for MSMEs.
• Suspension of initiating new insolvency proceedings up to one year.
• Excluding debt effect due to the COVID-19 pandemic from the definition of “Default”.

Also, under the ease of doing business, the Indian public companies can directly list in permitted foreign jurisdictions.

5. Decriminalisation of Companies Act Defaults: 

• Decriminalisation of Companies Act violations involving minor technical and procedural defaults such as delay in holding AGM, inadequacies in the board report, and shortcomings in CSR reporting.
• Majority of compoundable offences sections to be shifted to the internal adjustment mechanism.
• Seven compoundable offences were dropped, and five compoundable offences will be dealt with under the alternative framework.

Also Read: Aatmanirbhar Bharat Abhiyan – Part 4 (Highlights)

6. Public Sector Enterprises (PSE) Policy for New and Self-Reliant India Will be as Follows:

• A list of strategic sectors will be notified.
• In the strategic sectors, at least one PSE will be present.
• In other non-strategic sectors, PSEs will be privatised.
• The number of PSEs will be reduced between one to four by merging, privatising or bringing under the holding companies.

7. Support to State Governments:

• Taxation devolution to the extent of Rs 46,038 in April was given entirely as if Budget Estimates (BE) were valid, where actual revenue shows an unprecedented decline from BE.
• Revenue Deficit Grants to the extent of Rs 12,390 crore in April and May.
• State Disaster Relief Fund advance to the extent of Rs 11,092 crore in the first week of April.
• For anti-COVID activities, the Health Ministry released Rs 4,113 crore.
• At the Central Government request, the RBI increased Ways & Means Advance limit by 60%, the continuous overdraft days increased from 14 to 21 and also, the number of days for an overdraft in the quarter increased from 32 to 50.
• The net borrowing ceiling limit for the FY 2020-21 for the states has been increased from 3% of GDP to 5% of GDP, and this will create additional resources of Rs 4.28 lakh crore.

A Specific Scheme Will be Notified for the Increased 2% of GDP in Net Borrowings:

• From 3% to 3.5%: The first 0.50% will be a definite increase.
• From 3.5% to 4.5%: The next 1% will be divided into tranches of  0.25% each and has to be used for one nation one card, ease of doing business, power distribution matters and for urban local body revenues.
• From 3.5% 50 5.0%: At least three out of four measures have been achieved.

At the end of the press meet, the Union FM had bifurcated the stimulus provided under the Atmanirbhar Bharat Abhiyan

Table 1: Measures taken before the PM announcement of Rs 20 lakh crore package:

Table 2: Measures taken after the PM announcement of Rs 20 lakh crore package:

Finally, the overall total stimulus provided under Atmanirbhar Bharath Yojana consists of:

For any clarifications/feedback on the topic, please contact the writer at dvsr.anjaneyulu@cleartax.in

AJ

DVSR Anjaneyulu known as AJ, is a Chartered Accountant by profession. Loves to listening to music & spending time with family and friends.