Minister of State for Finance Anurag Singh Thakur
The government would be happy to answer queries from corporate sector on the new LTC cash voucher scheme to make it more successful, Minister of State for Finance Anurag Singh Thakur said in an interview to BusinessLine. He also said the stimulus announced so far has a bigger goal of reaching the less privileged sections of the society, through others as medium. Excerpts:
How do you view the two sets of the stimulus packages (Pradhan Mantri Garib Kalyan Yojana & Atmanirbhar Bharat and fiscally prudent proposals to stimulate demand in the economy)?
No country has come up with the kind of stimulus that we have. They didn’t have to give foodgrains and pulses to over 800 million people for over eight months. Besides, we have given more than ₹68,000 crore to around 28 crore individuals as cash. If you look at the Atmanirbhar Bharat package, one part if it is the reforms, which will have an impact over a period of time. We have seen that impact in the defence sector when it was made clear that over 100 items will produced locally and not imported. This will give boost to the ‘Make in India’ programme.
The changes in the Essential Commodities Act and the APMC Act will improve the income of farmers. See how the moratorium period of six months has helped individuals, institutions and companies. Apart from that there is an Emergency Credit Line Guarantee Scheme involving mortgage-free credit amounting ₹3-lakh crore where in the total amount sanctioned to non-individuals and individuals stands at ₹1.86-lakh crore, of which ₹1.32-lakh crore has been disbursed to 27 lakh borrowers .
Similarly, the partial credit guarantee schemes and the subordinated debt schemes have also done well.
These provisions and the change in the definition of MSME has actually benefited the sector. The change in norms for guaranteed credit (maximum amount of funding doubled to ₹10 crore and annual turnover limit raised to ₹250 crore from ₹100 crore.) actually helped many more people to come on board.
Look at the demand in the rural sector. For example, spending on MGNREGA now has gone up from ₹61,000 crore to ₹1.01-lakh crore. This has helped create 200 lakh mandays already and ₹61,000 crore or more have already been disbursed to the States. So this clearly shows the demand in the rural sector. Tractor sales showed 39 per cent growth. The GST collection in September stood at ₹95,000 crore-plus and it is higher than September last year.
So, I think the recovery is good, but we’re keeping our fingers crossed and putting in all efforts to boost the demand. As we have fixed the supply side, we’re now trying to boost the demand, by giving more money in the hands of people or through loans. I think it’s more to do with the sentiment now, which is improving with each passing day. And with the unlock phase happening every few weeks, I think it is further helping the economy come back on track.
When you say demand issue is being addressed, it seems to be mainly for the organised sector, what about the unorganised sector?
I totally agree with you. That is why Prime Minister Narendra Modi on Day One requested MSMEs and other industries to take care of their employees. The government has given the support through EPFO up to 100 employees, contributing 24 per cent of salary (12 per cent share of employees and equivalent share of employers). Withdrawal was permitted from the EPFO. The States were encouraged to use Building Construction Cess Fund and District Mineral Fund for the welfare of workers. That is actually helped a lot of people in the unorganised sector. Similarly the moratorium helped the smaller entrepreneurs and the businesses to survive during the pandemic, keep their units afloat and also help their people.
Do you have any plan to address cash crunch faced by larger section of the society? The government has recently come out with LTC Cash Voucher Scheme for government employees and employees in PSUs, PSBs and even private sector beside interest free festival advance. Do you have similar plan for other sections of the society?
We are expecting that the government employee will take advantage of it. At the same time we are expecting State governments to come out with similar schemes so that the tax free schemes could be given to the State government employees as well. We have extended that to the corporate sector also.
The festival season is coming. And I personally feel the employees who have saved in the past 6-7 months, they’ll be more than happy to spend that. They may be unable to travel, at least they can go out, shop or eat outside that will further give boost and help the less privileged. I will request the government employees to take the advantage of this. And to pass on some advantage to the less privileged who do not benefit from such schemes.
The government is also spending more on the capital infrastructure, giving it to the States to spend more and pushing them spend before March 31, 2021.
So that means in the next six months the State should spend more money, pay contractors, suppliers and all that. They will further give it to others. This will have a chain reaction, and the wheel will start moving. It will give more into the hands of smaller entrepreneurs and businesses, which will further create more employment at the grass-roots level. All these schemes may not help all directly but indirectly surely.
Have you talked to corporate sector so that they are also on board for LTC/LTA cash voucher scheme and giving similar benefit to their employees?
We have announced the scheme just now. And we didn’t want to start a dialogue before that. But certainly our officers will be speaking. We’ll also be talking to the various corporate bodies. I think they will also look into the details. We are ready to address their queries, if any. Because finally, it is going to help their employees and also those less privileged.
Will the Finance Ministry issue further details on new schemes?
I think the moment you announced the scheme, you have to give the details of the scheme also. So I think everyone is waiting for the fine print of it, based on which people will evaluate what is the benefit for them. I think they find it attractive. However, the important issue will be it is not only for their benefit, but also for those less privileged, who should also benefit out of this.