New Delhi:
To help revival of the economy battered by COVID-19, Finance Minister Nirmala Sitharaman on Monday announced a slew of measures, including Rs 1.1 lakh crore (Rs 1.1 trillion) credit guarantee scheme for improving health infrastructure, and enhancing the limit under the ECLGS by 50 per cent to Rs 4.5 lakh crore for the MSME sector facing liquidity crunch.
Sitharaman announced additional funding of Rs 23,220 crore for setting up paediatric beds and facilities in hospitals. Announcing a set of measures for reviving the economy battered by a severe second wave of COVID-19,
Sharing the details of stimulus package in a press conference, the finance minister said this comprises eight relief measures and other eight measures to support the economic growth.
She announced eight economic relief measures, four of which are new, including one item related specifically to health infrastructure. The FM also announced eight other items related to growth, trade and employment, in which six are new.
She announced Rs 1.1 lakh crore loan guarantee scheme for COVID-affected sectors, including health sector, which includes guarantee cover for expansion or for new projects.
Besides, she said, additional Rs 1.5 lakh crore limit enhancement done for Emergency Credit Line Guarantee Scheme (ECLGS) scheme.
The existing limit for ECLGS scheme, announced as part of Rs 20-lakh crore Atmanirbhar Bharat Abiyan package in May 2020, was Rs 3 lakh crore.
Last month, the finance ministry expanded the scope of the Rs 3 lakh crore ECLGS by including concessional loans to hospitals for setting up on-site oxygen generation plants.
Besides, the validity of the scheme was extended by three months to September 30 and or till guarantees for an amount of Rs 3 lakh crore are issued.
The last date of disbursement under the scheme has been extended to December 31.
Health sector will get a cover of Rs 50,000 crore aimed at upscaling medical infra, specially targeting underserved areas.Under the ECLGS 4.0, 100 per cent guarantee cover was given to loans up to Rs 2 crore to hospitals, nursing homes, clinics, medical colleges for setting up on-site oxygen generation plants.
Maximum loan of up to Rs 100 crore would be given for up to three years at the interest rate capped at 7.95 per cent.
The guarantee cover is for expansion of new projects under health, in areas other than 8 metro cities. Guarantee coverage is of 50% for expansion and 75% for new projects Guarantee duration will be up to 3 years
The interest rate on these loans has been capped at 7.5 per cent, which means the banks can offer loans less than this ceiling.
''Further,we are providing Rs 23,220 crore more primarily focussing on children and paediatric care. This Rs 23,220 crore will be spent this financial year itself,'' said Sitharaman.
It will also focus on funding of HR augmentation so that medical students, interns, nurses can also be brought in for helping in such emergencies, ICU beds will be made available, oxygen supply at central, district and subdistrict level will be ensured and also making sure that equipments and medicines, teleconsultation and ambulance service… all of that will be taken care of with primary focus on children. So paediatric care is the emphasis,'' Sitharaman said.
She said last year a Rs 15,000 crore emergency health systems project was implemented. Using that Rs 15,000 crore, there was a 25-fold increase in COVID dedicated hospitals.
Besides, 7,929 COVID health centres and 9,954 COVID care centres were set up, and oxygen supported beds increased by 7.5 times. There was also an increase in isolation beds and ICU beds by 42-fold and 45-fold, respectively.
''The Rs 15,000 crore which was used till March 2021 aiming at providing additional infrastructure and facilitating COVID care had good response and now Rs 23,220 crore is being provided with primary focus on children, but others also will benefit from it,'' the minister added.
Explaining the funding mechanism for the health sector, Expenditure Secretary T V Somanathan said the Rs 23,220 crore has been made available to the Ministry of Health immediately. '
It is part of this year's budget spending available to Ministry of Health as a Centrally Sponsored Scheme to be distributed to states and to be used in the National Health Mission.
''There is already a National Health Mission, this will be additional funding for a new set of outputs which is available immediately. This (Rs 23,220 crore) is available immediately, the pace of expenditure will depend on how quickly the states are able to do what needs to be done. We are ensuring that funding is not a constraint,'' Somanathan added.
Centrally sponsored schemes are jointly funded by the Centre and states. The new scheme for public health will have an outlay of Rs 23,220 crore, of which central share would be Rs 15,000 crore, as per the presentation made by the finance ministry.
Some experts have warned that a third COVID wave may affect children more than adults.
The Rs 50,000 crore credit guarantee scheme for health sector announced by Sitharaman is for a maximum loan amount of Rs 100 crore for up to 3 years. The interest rate is capped at 7.95 per cent, meaning banks can lend below that rate to health sector for upscaling medical infrastructure targeting under-served areas.