Further to Prime Minister Shri Narendra Modi’s announcement on economic reforms aggregating INR 20 lakh crores to help the economy recover from the impact of Covid 19, on May 14, 2020, the Finance Minister released the second set of reforms with special focus on migrant workers, small farmers, street vendors and affordable housing.

The key reliefs announced by the Finance Minister in part II of the reforms are the following:

  • Free food for migrants who don’t have cards issued under the National Food Security Act, 2013 or state cards for a period of next two months. While free food is already being provided by the government to migrants, before this announcement, the relief was only available to migrants who have been issued these cards.
  • A scheme for rental housing for migrant workers, under which incentives will be offered to private manufacturing units and industrial units to develop affordable housing and government funded houses would be converted into affordable renting accommodations for migrant workers. This will be done on Public Private Partnership (PPP) on concessionaire basis.
  • Extension of the Credit Linked Subsidy Scheme (CLSS) till March 2021 (which was earlier operational till March 2020). The CLSS scheme is aimed at providing affordable housing to middle income households in the income group Rs 6 lakh to 18 Lakh extended to March 2021.
  • Extension of additional capital emergency funds of Rs 30,000 crore through NABARD for post-harvest Rabi and Kharif related activities for small and marginal farmers.
  • Concessional credit of Rs 2,00,000 crores extended through Kisan Credit Cards for PM-Kisan beneficiaries, fishermen and animal husbandry farmers.
  • Twenty Five Lakh Kisan Credit Cards have been sanctioned with a cumulative credit limit of Rs 25,000 crores.
  • Prompt repayment incentives on crop loans due from March 1, 2020 has been extended till May 31, 2020.
  • Special credit facility of Rs 5,000 crores to be given to street vendors which shall include issuance of an initial working capital of Rs 10,000. Street vendors shall be given incentives by means of monetary rewards and enhanced working capital through payments which are made digitally.

The exact blueprint of the proposed reforms will be known only once the necessary notifications are issued. The next leg of reforms (i.e. part III of the reforms) are likely to be announced tomorrow (May 15, 2020) and we will be running similar updates for the same.

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