Lok Sabha Question No. 20 (UNSTARRED), answered on 2020-09-14
Subject: Impact of Covid-19 Pandemic and Lockdown ofEconomy
Ministry: FINANCE
Asked by: Balubhau (Alias Suresh Narayan) Dhanorkar, Mala Roy, Behanan Benny, Asaduddin Owaisi, N.K. Premachandran, Pushpendra Singh Chandel, Sangeeta Kumari Singh Deo, Adoor Prakash, Jayanta Kumar Roy, Imtiaz Jaleel Syed, Kani K. Navas

## GOVERNMENT OF INDIA MINISTRY OF FINANCE DEPARTMENT OF ECONOMIC AFFAIRS

## LOK SABHA UNSTARRED QUESTION NO. 20

TO BE ANSWERED ON 14.09.2020

## IMPACT OF COVID-19 PANDEMIC AND LOCKDOWN OF ECONOMY

20.  SHRI BALUBHAU ALIAS SURESH NARAYAN DHANORKAR:

SHRIMATI MALA ROY: SHRI BENNY BEHANAN: SHRI ASADUDDIN OWAISI: SHRI N.K. PREMACHANDRAN: SHRI KUNWAR PUSHPENDRA SINGH CHANDEL: SHRIMATI SANGEETA KUMARI SINGH DEO: ADV. ADOOR PRAKASH: DR. JAYANTA KUMAR ROY: SHRI SYED IMTIAZ JALEEL: SHRI K. NAVASKANI:

Will the Minister of FINANCE be pleased to state:

- (a)   the details of financial crisis in the country due to lockdown and restrictions imposed due to Covid-19 indicating  the  fall  in  economy  in  last  quarter  along  with  the  sectors  affected  due  to  lockdown  and unlock process and the action taken in this regard;
- (b)  the  details  and status of stimulus package including AtmaNirbhar Bharat and Pradhan Mantri Garib Kalyan Yojana as announced and implemented by the Government for various sectors/ individuals to overcome the economic slowdown, Sector-wise along with their utilization and the manner in which the Government is planning to raise funds for stimulus package;
- (c)  the details of assistance given to those who have lost their livelihood due to lockdown and the steps recently taken by the Government for the welfare of the workers of unorganized sector;
- (d)  whether  the  Government  has  analyzed  the  progress  of  programmes and schemes implemented as stimulus package and if so, the details thereof along with the future strategy likely to be adopted for reviving the economy of the country;
- (e)  whether the Government proposes to extend the period of moratorium and also to write off the interest of  loans  during  the  moratorium  period  considering  the  Covid-19  and  there  is  any  demand  for restructuring of loans and if so, the details thereof along with the steps taken in this regard; and
- (f)  whether it has come to the notice of the Government that it is impossible to pay the interest even after the lifting the moratorium and if so, the action taken for protection from the penal actions of the banks and financial institutions?

## ANSWER

## MINISTER OF STATE IN THE MINISTRY OF FINANCE (SHRI ANURAG SINGH THAKUR)

- (a) As per the Estimates of Gross Domestic Product for the First Quarter (Q1) of 2020-21 released by the National Statistical Office on 31st August 2020, the real GDP in India contracted by 23.9 per cent during the first  quarter  of  2020-21 (as  against  a  5.2  per cent growth in  Q1  of 2019-20). On the demand side, private  consumption  spending fell  by  26.7  per  cent  and  Investment  demand  also  declined  by  47.1  per cent. On the supply side, the decline in Gross Value Added (GVA) was broad-based with fall of 50.3 per cent seen  in construction followed by services like trade, hotels,  transport  and  communication,

manufacturing and mining. Agriculture emerged as the bright spot, growing at a healthy rate of 3.4 per cent.

(b) to (d):  The Government has announced a special economic and comprehensive package of Rs. 20 lakh crores - equivalent to 10% of India's GDP - to combat the impact of the COVID-19 pandemic in India. The details of the major components of the package along with the status are attached at Annexure.

Under  the  'Aatma  Nirbhar  Bharat  Abhiyan',  an  additional  Rs.  40,000  crore  has  been  allocated  for MGNREGS to help generate  nearly  300  crore  person  days  to  address  the  need  of  work  of  returning migrant workers. Under Prime Minister Garib Kalyan Package (PMGKP), financial assistance has been extended to  building  &  construction  workers  (BoCW).  31  State  and  UT  Governments  have  announced cash  benefits,  ranging  from  Rs.1000/-  to  Rs.6000/-  to  around  1.82  crore  workers  and  total  amount disbursed is Rs. 4987.18 crore as on 7th September, 2020.

Government of India launched a massive rural public works scheme 'Garib Kalyan Rojgar Abhiyaan' on June 20, 2020 to empower and provide livelihood opportunities to the returnee migrant workers and rural citizens. 25 schemes of the government have been brought together under this programme and villages across 116 districts in the six states viz. Bihar, Uttar Pradesh, Madhya Pradesh, Rajasthan, Jharkhand, and  Odisha  through  the  Common  Service  Centres  and  Krishi  Vigyan  Kendras.  A  total  of  26.34  crore person days have been generated and expenditure of an amount of Rs.22761.15 crore has been incurred under the programme as on 8th September 2020.

The implementation of the package is reviewed and monitored regularly.

(e) & (f) The Reserve Bank of India has announced certain regulatory measures wherein, in respect of all term loans (including agricultural term loans, retail and crop loans) outstanding as on March 1, 2020, all lending institutions regulated by the Reserve Bank were permitted to grant a moratorium of six months on payment of all instalments falling due between March 1, 2020 and August 31, 2020. Subsequently, the Reserve Bank of India has provided a framework to enable the lenders to implement a resolution plan in respect of eligible corporate exposures without change in ownership and personal loans. Under the Plan, lending institutions may, inter alia, grant moratorium upto two years.

The Government has constituted an Expert Committee for making an overall assessment of the impact of waiving of interest and waiving of interest on interest on the COVID-19 related moratorium on the national economy and financial stability.

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## Annexure

## Pradhan Mantri Garib Kalyan Package (As per press release dated 7 th September, 2020)

Around 42 crore poor people have received financial assistance of Rs. 68,820 crore so far, the details of which are as under:

-  Rs.  17,891 crore  front  loaded  towards  payment  of  the  first  instalment  of  PM-KISAN  to 8.94 crore beneficiaries.
-  Rs.10,325 crore credited to 20.65 crore (100%) women Jan Dhan account holders as first installment. Rs. 10,315 crore credited to 20.63 crore (100%) women Jan Dhan account holders with second  installment. Rs.10,312  crore  credited  to 20.62  crore  (100%) women  Jan  Dhan  account holders with third installment.
-  Total Rs. 2,814.5 crore disbursed to about 2.81 crore old age persons, widows and disabled persons in two installments. Benefits transferred to all 2.81 crore beneficiaries in two installments.
-  1.82 crore Building & construction workers received financial support amounting to Rs.4,987.18 crore.
-  Under  Pradhan  Mantri  Garib  Kalyan  Ann  Yojana,  37.52  LMT  of food  grains has  been distributed to 75.04 crore beneficiaries in April '20, 37.46 LMT distributed to 74.92 crore beneficiaries in May '20, and 36.62 LMT distributed to 73.24 crore beneficiaries in June '20. Scheme was further extended for 5  months  till  November.  Since  then, 98.31 LMT  foodgrains  has  been  lifted  by  States  /UTs  so far. In July '20 36.09 LMT food grains has been distributed to 72.18 crore beneficiaries, in August '20 30.22 LMT distributed to 60.44 crore beneficiaries, and in September '20 1.92 LMT distributed to 3.84 crore beneficiaries as on 7th September, 2020. A total of 5.43  LMT pulses has also been distributed to 18.8 crore beneficiaries between April - June '20. 4.6 LMT Chana has been dispatched so far.  In July 1.03 LMT Chana has been distributed to 10.3 crore beneficiary households, in August 23,258 MT distributed to 2.3 crore beneficiary households. As on 7th September,2020, 1475 MT of Chana distributed to 0.15 crore beneficiary households in September, 86 MT distributed to 0.008 crore beneficiary households for October, and 40 MT distributed so far to 0.004 crore beneficiary households for November.
-  During the distribution period up to August, total 2.67 LMT of food grains was distributed to 5.32 crore migrants. This works out to an average of about 2.66 crore beneficiaries per month, which is nearly 95% of the estimated number of migrants. Total quantity of Chana distributed is 16,417 MT to 1.64 crore migrant households, which is 82 Lakh households on an average per month.
-  Total  8.52 crore Pradhan  Mantri  Ujjwala  Yojana  (PMUY)  cylinders  have  been  booked  and  already delivered for April and May 2020 under this Scheme so far. 3.27 crore PMUY free cylinders delivered to beneficiaries for June 2020, 1.05 crore for July 2020, 0.89 crore for August 2020, and 0.15 crore for September 2020.
-  36.05 Lakh members of EPFO has taken benefit of online withdrawal of non-refundable advance from EPFO  account  amounting  to  Rs. 9,543  crore.  24% EPF  contribution transferred  to  0.43  crore employees  amounting  to  Rs.  2476  crore.  Benefits  for  March  were  given  to  34.19  lakh  employees amounting to Rs. 514.6 crore, for April given to 32.87 lakh employees amounting to Rs. 500.8 crore, for May given to 32.68 lakh employees amounting to Rs. 482.6 crore, for June given to 32.21 lakh employees amounting to Rs. 491.5 crore, for July given to 30.01 lakh employees amounting to Rs. 461.9 crore, and for August given to 1.77 lakh employees amounting to Rs. 24.74 crore.
-  MNREGA : Increased rate of has been notified w.e.f 01-04-2020. In the current financial year, 195.21 crore person's man-days of work generated. Further, Rs 59,618 crore released to states to liquidate pending dues of both wage and material.

-  Under District  Mineral  Fund (DMF),  States  have  been  asked  to  spend  30%  of  the  funds,  which amounts to Rs. 3,787 crore and that Rs. 343.66 crore has been spent so far.

## Progress of Aatma Nirbhar Bharat Package - Progress So Far pertaining to Ministry of Finance and Ministry of Corporate Affairs

-  Rs  3  lakh  crore  Collateral-free  Automatic  Loans  for  Businesses,  including  MSMEs  and  Rs 45,000 crore Partial Credit Guarantee Scheme 2.0 for NBFCs

As per press release dated 3 rd September 2020, an amount of Rs. 1.58 lakh crore has been sanctioned as on 31.8.2020 under the 100% Emergency Credit Line Guarantee Scheme (ECLGS), out of which more than Rs. 1.11 lakh crore has been disbursed in 24 lakh accounts. Under Partial Credit Guarantee Scheme 2.0, Bonds/CPs of Rs. 25,055.5 crore have been approved for purchase by Public Sector Banks so far, out of which Rs. 13,318.5 crore amounting to more than 53% of the portfolio pertains to Bonds/CPs rated below AA-, a crucial intervention for lower rated Bonds/CPs.

##  Rs 30,000 crore Special Liquidity Scheme for NBFCs/HFCs/MFIs

As per press release dated 24 th July  2020, five proposals involving an amount of Rs. 3090 crore have been sanctioned as on 23 rd July. Further, 35 more applications have been received seeking financing upto Rs. 13776 crore, which are under process.

-  For local MSMEs, Department of Expenditure amended present Rule 161 (iv) of General Financial Rules (GFR),2017 and GFR Rules relating to Global Tenders. Now, no Global Tender Enquiry (GTE) shall  be  invited  for  tenders  upto  Rs.  200  crore,  unless  prior  approval  is  obtained  from  Cabinet Secretariat.

## Relief to Contractors

All  central  agencies  like  Railways,  Ministry  of  Road  Transport  and  Highways  and  CPWD  will  give extension of up to 6 months for completion of contractual obligations, including in respect of EPC and concession  agreements.  On  the  invocation  of  Force  Majeure  Clause  (FMC),  contract  period  may  be extended for a period not less than three months and not more than six months without imposition of any cost  or  penalty  on  the  contractor/concessionaire.  Instructions  were  also  issued  to  return  the  value  of performance  security  to  the  contractor/  suppliers  proportional  to  the  supplies  made/  contract  work completed to the total contract value. The same is being implemented by various Departments/Ministries.

## Rs 30,000 crore Additional Emergency Working Capital Funding for farmers through NABARD

New  front  loaded  special  refinance  facility  of  Rs.  30,000  crore  was  sanctioned  by  NABARD  during COVID-19 to RRBs & Cooperative Banks to benefit 3 crore farmers, consisting mostly small and marginal farmers  in  meeting  their  credit  needs  for  post-harvest  and  kharif  sowing  requirements.  Rs.  24,876.87 crore out of Rs. 30,000 crore has been disbursed as on 06.07.2020, out of this special facility.

## Support to State Governments

Borrowing limits of States has been increased from 3% to 5%, for 2020-21 in view of the unprecedented situation, which will give States extra resources of Rs. 4.28 lakh crore. Additional borrowing of 2 per cent of projected GSDP will be given to the States in 2020-21 subject to implementation of specific State Level Reforms.

## Rs 50,000 crore liquidity through TDS/TCS rate reduction

TDS  rates  for  specified  payments  to  residents  and  specified  TCS  rates  were  reduced  by  25%  for transactions made from 14th May, 2020 to 31st March, 2021.

## Other Direct Tax Measures

-  The Central Board of Direct Taxes (CBDT) has issued refunds worth Rs 71,229 crore in more than 21.24 lakh cases upto 11th July, 2020, to help taxpayers with liquidity in Covid-19 pandemic days, since the Government's decision of 8 th April, 2020 to issue pending income tax refunds at the earliest, as stated in press release dated July 17, 2020. Income tax refunds amounting to Rs. 24,603 crore have  been  issued  in  19.79  lakh  cases  to  taxpayers  and  corporate  tax  refunds  amounting  to  Rs. 46,626 crore in 1.45 lakh cases have been issued to taxpayers during Covid days.
-  The Department also issued Notification dated 24.6.2020, the due date for income-tax return for FY 2019-20 (Assessment Year 2020-21)  has been extended from 31st July, 2020 (for individuals etc.) and 31st October,2020  (for  companies  etc.)  to  30th November,  2020.   Further,  the  due  date  for furnishing  of  tax  audit report  has  also  been  extended  from  existing  30th September,  2020  to 31st October, 2020.
-  The Department of Revenue has extended the time barring date for assessments getting barred by limitation  on  30th September,  2020  to 31st March,  2021. Payment  without  additional  amount  under the  'Vivad  se  Vishwas'  Scheme  will  be  extended  to  31st December,  2020  and  the  legislative amendments for the same in the Vivad Se Vishwas Act, 2020 (VsV Act) shall be moved in due course to  time.  Further,  through  the  Notifications,  compliance  dates  mentioned  under  the  VsV  Act  falling during  period  20th March,  2020  to  30th December,  2020  have  been  extended  to  31st December, 2020.

## Enhancement of Ease of Doing business through IBC related measures

-  Ministry of Corporate Affairs has raised the threshold of default under Section 4 of the IBC, 2016 to Rs 1 crore  (from  the  existing  threshold  of  Rs  1  lakh)  i.e.  'in  exercise    of  powers  conferred  under Section  4  of  Insolvency  &  Bankruptcy  Code,  2016  (31  of  2016),  the  Central  Government  hereby specified  Rs  1  crore  as  the  minimum  amount  of  default  for  the  purposes  of  the  said  section'  vide Notification dated 24.6.2020.
-  Ministry  of  Corporate  Affairs  is  finalising  a  special  insolvency  resolution  under  section  240A  of  the Code, to provide relief to the MSMEs and the same would be notified soon.
-  Insolvency and Bankruptcy Code (Amendment) Ordinance, 2020 has been promulgated on 5th June, 2020 thereby provided for insertion of Section 10A in the Insolvency and Bankruptcy Code 2016 to temporarily suspend initiation of Corporate Insolvency Resolution Process (CIRP) under Section 7, 9 & 10 of the Code for a period of six months or such further period, not exceeding one year from such date.

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