FM Sitharaman Press Conference Highlights: Industry experts welcome fresh stimulus package

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“FM's announcement on free visas has a very strong symbolic message that we have the confidence to welcome visitors and that tourism and hospitality is a strong pillar of post-Covid economic recovery strategy. We sincerely hope that such measures will be logically followed by measures to make the industry recover and be ready to welcome tourists. Measures like liquidity support and exemption from statutory taxes. HAI would like to compliment the FM on this initiative and look forward to some more pragmatic initiatives to create jobs and livelihoods through a rejuvenated Tourism and Hospitality industry. As always HAI will be there for a committed role to be played by the Tourism and Hospitality industry in the national economic development programme."

“The FM has certainly provided the booster dose for the economy to be back to its revival trajectory after the second wave had dampened India’s economic revival story.

The FM’s today’s announcement will provide a shot in the arm for Atmanirbhar Bharat, as the Rs. 1.1 lakh crore loan guarantee scheme for Covid-19 affected sectors will be implemented across sectors of healthcare, travel and tourism and agriculture which will help in discharging liabilities and re-start business. While the earlier stimulus package focussed more on the infrastructure and construction industry, the new economic measures announced today by the Hon’ble FM Nirmala Sitharaman, expands the ambit of the loan assistance to previously uncovered segments like tour operators. With the pace of vaccination being ramped up on the domestic front and global tourism picking up, it is at the right time that the FM has focussed on reviving and revitalizing the tourism sector.

The increase in the ECLGS, will now have a total outlay of Rs 4.5 lakh crore, higher from the earlier Rs. 3 lakh crore, and credit guarantee scheme to facilitate loans to 25 lakh persons through micro finance institutions will further bolster the MSME sector, these being engines for job creation and the cornerstone of the economic growth.”

“The government’s announcement of policy initiatives to support the weaker sections of the economy is a welcome move. Enlarging the scope of the ECLGS to INR4.5tn can potentially help during the coming months of recovery in the economy.

The credit guarantee scheme to facilitate loans to small borrowers through MFIs is also a welcome move. However, the target beneficiary set of 25 lakh remains a small portion of the around six crore borrowers for the sector.

Given that most announcements are in the nature of credit guarantee, today’s announcements will likely not lead to any notable pressure on the fiscal immediately.”

The Finance Minister today has announced the much-needed relief measures, for multiple affected sectors. Considering the fact that almost 90% of the Emergency Credit Line Guarantee Scheme (ECLGS) outlay was effectively utilized to support the affected MSME sector, an additional Rs 1.5 lakh crore will greatly catalyze the revival as well as growth processes of the MSMEs. This announcement came at a significant moment, as World MSME day was celebrated a day prior. Further, the credit guarantee scheme for 25 Lakh individuals through the micro-finance institutions and the financial measures announced for the tourism sector are much appreciated. With the economy carefully opening up in stages, the announced measures will certainly prove viable for the MSMEs and individuals towards their efforts to overhaul the broken cash-flows.

The government of India has announced a few additional fiscal relief measures for the businesses and borrowers impacted severely by the second wave of the pandemic. The size of the ECLGS programme which was launched in May 2020 and had undergone subsequent revisions to include a larger pool of borrowers, has been increased from Rs. 3.0 Lakh Cr to Rs 4.5 Lakh Cr. As per government sources, an aggregate amount of Rs 2.69 Lakh Cr has been disbursed under this programme by banks and NBFCs. Acuité has also noted that a substantial number of MSMEs in its rated portfolio has availed additional funding from ECLGS which has helped them to maintain an adequate liquidity position and service its existing debt despite the challenging business environment.

"Indian Chamber of Commerce (ICC) highly appreciates the new announcements today by Hon’ble Finance Minister to provide respite to the pandemic struck economy, liquidity starved sectors. ICC compliments the thoughtful gesture by FM to zero-in on areas which were most harshly hit and currently going through difficult phases. This timely intervention will definitely provide a boost to sectors like Health, Micro finance, Tourism, Fertilizer, Export, Digital Connectivity, Electronics, Power Distribution etc.

Ministry’s decision to revive tourism sector of the country through providing financial support to more than 11000 registered tourist guides and other tourism stakeholders. We think this decision was long due. Providing free tourist visa to 5 lakh tourist is also a commendable initiative.

ICC also appreciates Ministry’s decision to revive North Eastern Regional Agricultural Marketing Corporation (NERAMAC) through provision of a revival package of Rs. 77.45 Crore for financial restructuring and infusion of funds. The target plan to give 10-15% higher price to farmers in North East by-passing middlemen can be a game changer. As the nodal Chamber of North East, ICC highly acclaims this decision.

We have also found that the announcement regarding initiating a ‘New Streamlined Process’ for PPP Projects and Asset Monetisation to ensure speedy clearance of projects to facilitate private sector can be instrumental in the revival process.

Overall, ICC welcomes the announcements made by the Finance Minister for introducing the recovery process with a positive vibe."

"The announcements were largely focused on providing credit support and extending the existing schemes so the impact of second wave could be minimal on the economy and individuals. Since there is no major direct stimulus announcement, there will be minimal or no impact on fiscal balance. In addition, the measures announced for stressed sectors viz. MSMEs and travel & tourism would help in setting a recovery roadmap as they’re still struggling due to the restricted activities."

FM Nirmala Sitharaman Announces Credit Guarantee Scheme To Facilitate Loans To 25 Lakh Persons Via MFIs

Under the new credit guarantee scheme announced by Finance Minister Nirmala Sitharaman, a guarantee will be provided to scheduled commercial banks for loans to new or existing non-banking financial…