Finance Ministry updates major steps taken to boost economy in the last few months

The government has focused on clearing all its dues, including that of Public Sector Units(PSU) on enabling retail credit by supporting the NBFCs and housing finance companies, which have a deep impact on consumption, said Chief Economic Adviser K V Subramanian in a press conference held by the Finance Ministry.

As much as 60 per cent pending dues of the CPSEs(including Maharatnas and Navratnas)  up to Rs 61, 000 crore have been cleared in the last two months.He said 21 out of 32 Maharatnas have set up an online bill tracking systems to reduce pendency in bill payment and reduce Account Payables of CPSEs. The current dues are Rs 4877 crore, he added.

The CEA said total sanction support to the tune Rs 4.4 lakh crores has been given of which 1.29 lakh crores have been pooled buyouts of assets. 

The partial guarantee schemes for NBCs and HFCs was sanctioned to remove the stress in the sectors. The Cabinet approval has been provided for those borrowers who slid into SMA-0 category and for asset pools rate BBB+ or better, which will help the asset pools which are not able to find market.

Within two days 17 proposals amounting Rs 7657 crore was approved and proposals amounting to Rs 20,000 crore are expected to be approved in the next two weeks under the partial credit guarantee scheme.

On the banking sector, he said, the RBI directive to introduce loans to repo rate linked products have resulted in more than 8 lak loans amounting to Rs 72,201 crore have been sanctioned til Nov 27 last, the CEA informed.

Supporting MSMEs through bill discounting enabling them with cash flows and tax refunds to boost consumption have been emphasised on to boost consumption, he added.

"Over 5 lakh bills amounting to Rs 12,698 crores have been undertaken under this window to help MSMEs tide over their cash flow problems,"  said Subramanian.

He said the steps taken on the investment side will go a long way.

The government has focused on capital expenditure, he said. Further steps like corporate tax rate cuts to enhance the risk-return tradeoff to ease the corporate space when they decide to make investment, supporting the completion of real estate projects by providing them last mile financing, recapitalization of the Public Sector Banks, Credit expansion by PSBs by enabling honest decision making, emphasis on disinvestment to enhance efficiency in the economy are the measures which have been taken he added.

Foreign Direct Investment increased to USD 35,000 billion in the first half of 2019-20 as against USD 31,000 billion during the same period last year, he said.
Capex of Rs 3.38 lakh or 66 per cent of the capital expenditure budget has already been undertaken by the government, he stated. The Indian Railways and the Ministry of Road Transport has announced to undertak Rs 2.46 lakh crore by Dec 31 next and they will undertake more capital expenditure in the remaining three months of this fiscal.

Till Nov last, 32 Maharatnas have undertaken Capex of Rs 98,000 crore and projected to undertake Rs 60,000 crore in the remaining part of the financial year.

Subramanian said a realty fund of Rs 25000 crore named SWAMIH for the last mile financing of the stalled housing project has been approved. It  is fully operational and found traction with 13 entities including HDFC, SBI, LIC.

Transparent and targetted due diligence has been done to ensure the investment goes where it is intended.

Speaking about credit expansion through PSBs, Subramanian said, Rs 4.9 lakh crore of budgeted funds have been disbursed of which Rs 2.2 lakh crore has gone to corporates, Rs 72,985 crores to MSMEs and Rs 39,453 crore to retail borrowers.

In order to enable and protect honest decision making in PSBs Internal Advisory Committees(IAC) have been set up to decide on Vigilance and No Vigilance cases. The committee will take decisions along with the Chief Vigilance Officer, he added.

He further said that the Foreign Portfolio Investment(FPI) limits have been raised and KYC process eased to attract corporate investment.

"Several changes in the KYC norms, including simplified documentation requirement and exemption regukated entities, have been approved in consultation with SEBI on Nov 5 last," the CEA said.

The FPI limit in a company has been raised from 24 per cent to sectoral foreign investment limit with effect from April 1, 2020, he informed. 

Speaking about the job sector, Subramanian said there has been a reduction of 5 per cent in the number of casual workers  and an increase of 5 per cent in salaried employees in the last five years, which means 2.3 cr jobs moved from casual to salaried.

In the rural areas casual workers have moved to salaried jobs or self-employed livelihoods and in the urban areas the shift has been from self-employed to salaried jobs. There has been also reduction in the number of people involved in unpaid family work, he added.

Revenue secretary, Ajay Bhushan Pandey, said Income tax refunds as of Dec 11 last in this fiscal stands at Rs 1.57 lakh crore compared Rs 1.23 lakh crore in the last financial year.

IGST return stands at Rs 38,988 crore till date whereas it was Rs 56,057 last year. 

ITC (input tax credit) refunds stand at Rs 33,395 crore as of now in 2019-20 versus Rs 36,513 crore in FY19, he added.