Nod to allocation of free food grains to migrantsUpdated: May 21, 2020 00:02 IST
New Delhi: The Union cabinet, at a meeting chaired by Prime Minister Narendra Modi, on Wednesday approved the distribution of free foodgrains to migrant workers, moving to ease the distress of those left stranded in transit by the lockdown imposed on March 25 in the aftermath of the coronavirus disease (Covid-19) pandemic.
The cabinet also approved a new Special Liquidity Scheme for non-banking financial companies (NBFCs) and housing finance companies (HFCs) to improve their liquidity. It also gave its approval to an emergency credit line guarantee scheme for micro, small and medium enterprises and small entrepreneurs to borrow an additional Rs. 3 lakh crore.
According to an official statement released after the cabinet meeting, around 80 million migrants would be eligible to receive 5 kg of foodgrains per month for May and June free of cost
It would entail an estimated food subsidy of about Rs 2,982.27 crore. Expenditure on transport and handling charges and dealer margins will account for about 127.25 crore more.
The cabinet approved a finance ministry proposal to launch a new liquidity scheme for NBFCs and HFCs.
The direct financial implication for the Government is Rs. 5 crore, which may be the equity contribution to a special purpose vehicle (SPV). Beyond that, there is no financial implication for the government until an underlying guarantee s invoked.
An SPV would be set up to manage a stressed asset fund (SAF) whose special securities would be guaranteed by the government and purchased by the Reserve Bank of India (RBI). The proceeds of the 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 cabinet also gave its nod to additional funding of up to Rs. 3 lakh crore to eligible MSMEs and small entrepreneurs. Under the scheme, the National Credit Guarantee Trustee Company Limited will offer a 100% guarantee for the loan amount. A corpus of Rs. 41,600 crore shall be provided by government, spread over the current and the next three financial years.