1st instalment of stimulus puts almost no financial burden on exchequer

NEW DELHI: The first instalment of stimulus package announced by government on Wednesday will just put a burden of Rs 2,500 crore on the exchequer as all other measures involve bank loans and guarantees have almost no of negligible fiscal impact, an expert analysis on the stimulus measures has said.

So, besides paying the provident fund on behalf of both employees and employer to 3.67 lakh establishments and for 72.22 lakh employees for another three months involving Rs 2,500 crore expenditure, other measures do not involve any financial outgo for the government.

Government on Wednesday came out with 15 new and some enhanced measures to revive businesses, and support workers via fiscal incentives and regulatory easing under the mega stimulus package — Self-Reliant India Movement involving an amount of Rs 20 lakh crore.

According to the analysis done by chartered accountant Mihir Modi, the measures in the economic package such as collateral free loan, subordinated debt , fund of funds for msme, all involve support to be provided by banks and other institutions.

Similarly, the Rs 90,000 crore liquidity to Discoms also involve state guaranteed loans that has to be paid with interest. The measures this does not involve direct government support, the analysis has said.

“The Rs 30,000 crore special liquidity to NBFC / HFC / MFI and Rs 45,000 crore partial credit guarantee scheme to NBFC are Good step for creating liquidity. Although the crisis has been deferred and not resolved. Moreover, the cost to the government is nil as it is not going to purchase the securities to be issued by them. Only guarantee will be provided by the government,” the analysis said.

With regard to proposal to bar global tenders below Rs 200 crore, the expert analysis said that though the step will promote Make i. India, For projects between 200-1000 crore, provision for mandatory local collaboration can be inserted, so that local entrepreneurs will get exposure of global best practices.

It has also said that the government should also increase tha interest payout on pending income tax refunds from 6 to 9 per cent to help the taxpayers during the current difficult period.