Nirmala Sitharaman leans on banks, institutions to fund package

Nirmala Sitharaman leans on banks, institutions to fund package

Finance minister Nirmala Sitharaman (File photo)

NEW DELHI: The first package in the Atmanirbhar Bharat Abhiyan unveiled by FM Nirmala Sitharaman on Wednesday seems to have leant more on public sector banks (PSBs) and institutions, and the outgo from the Budget appears to be minimal.
While the Rs 3-lakh-crore automatic loan for businesses and MSMEs is backed by government guarantee, the burden will be felt by PSBs. Similarly, the Rs 90,000-crore liquidity infusion for distribution companies will be handled by entities such as Power Finance Corporation and Rural Electrification Corporation. Even the relief under the employees’ provident fund is largely an accounting exercise and provide a small relief to staffers whose contribution to the scheme will be reduced.
A former finance secretary said the Centre’s stretched finances allowed little headroom. “Because of this, you have to be innovative. You have to bank on everything available in the system,” he said.
Asked about the cash outgo for the first package, Sitharaman said she would prefer to wait until all the packages are announced, although she said the increase in market borrowing could be a source of funding the packages. Kerala FM Thomas Issac said if the first package is a fair sample, the Rs 20-lakh-crore stimulus is going to be deeply disappointing. “The actual outflow of resources directly from the Budget is only around Rs 30,000 crore,” Is

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