Atmanirbhar Bharat package for food grains to migrants gets cabinet nod

According to an official statement released after the cabinet meeting, ex-post facto approval was given for allocation of foodgrains from the central pool to approximately eight crore migrants at 5 kg per person per month for May and June free of cost.

The union cabinet, led by Prime Minister Narendra Modi, on Wednesday gave its nod to the atmanirbhar Bharat package for providing foodgrains to stranded migrants for the next two months.

The cabinet also approved additional funding of up to ₹3 lakh crore at a concessional rate of 9.25 per cent through the Emergency Credit Line Guarantee Scheme (ECLGS) for the MSME sector hit hard by the coronavirus crisis. (HT photo)

According to an official statement released after the cabinet meeting, ex-post facto approval was given for allocation of foodgrains from the central pool to approximately eight crore migrants at 5 kg per person per month for May and June free of cost.

It would entail an estimated food subsidy of about ₹2,982.27 crore. Further, the expenditure towards intra-state transportation and handling charges and dealer’s margin will account for about 127.25 crore. Accordingly, the total subsidy from the Centre is estimated at about ₹3,109.52 crore, the statement said.

The cabinet also approved a new Special Liquidity Scheme for Non-Banking Financial Companies (NBFCs) and Housing Finance Companies (HFCs) to improve their liquidity position.

The cabinet also approved additional funding of up to ₹3 lakh crore at a concessional rate of 9.25 per cent through the Emergency Credit Line Guarantee Scheme (ECLGS) for the MSME sector hit hard by the coronavirus crisis.

The Cabinet also approved a finance ministry proposal to launch a new Special Liquidity Scheme for NBFCs and HFCs.

The direct financial implication for the government is ₹5 crore, which may be the equity contribution to the Special Purpose Vehicle (SPV).

An SPV would be set up to manage a Stressed Asset Fund (SAF) whose special securities would be guaranteed by the government Government of India and purchased by the Reserve Bank of India (RBI) only. The proceeds of sale of such securities would be used by the SPV to acquire short-term debt of NBFCs/HFCs.

The Scheme will be administered by the Department of Financial Services, which will issue the detailed guidelines, the statement said.

The SPV would issue securities as per requirement subject to the total amount of securities outstanding not exceeding Rs. 30,000 crore to be extended by the amount required as per the need. The securities issued by the SPV would be purchased by RBI and proceeds thereof would be used by the SPV to acquire the debt of at least investment grade of short duration (residual maturity of upto 3 months) of eligible NBFCs / HFCs, the statement added.