Industry Development Steps: FRBM Act, Reforming Banking Sectors, NIRVIK

Improving credit access. Increasing cash in hand for the businesses.

  • Proposals regarding decriminalizing the Companies Act.
  • Relooking at other laws.
  • Fine-tuning the Contract Act.
  • Creating a taxpayers charter.
  • Proposal to spend ₹ 30,42, 230 crore in 2020 - 21.
  • Revised deficit is targeted at 2.7% of GDP higher than the revised estimate of 3.8% in 2019 - 20.

FRBM Act

  • Fiscal Responsibility and Budget Management.
  • Provides for a trigger mechanism for a deviation from the estimated fiscal deficit.
  • Structural reforms in the economy with unanticipated fiscal implications.

Trends in Deficit (% of GDP)

Trends in Deficit (% of GDP)
Deficits2018 - 19 (Actuals) 2019 - 20 (Budget Estimates) 2019 - 20 (Revised Estimates) 2020 - 21 (Budget Estimates)
Fiscal Deficit3.43.33.83.5
Revenue Deficit2.42.32.42.7
Effective revenue Deficit1.41.31.51.8
Primary Deficit0.40.20.70.4

Reforming Banking Sectors, Making Them More Accountable

  • Deposit Insurance and Credit Guarantee Corporation.
  • Permission to increase Deposit Insurance Coverage from ₹ 1 lakh to ₹ 5 lakh per depositor.
  • Amending Banking Regulation Act to strengthen Cooperative Banks.
  • Scheduled commercial Banks health under monitored through a robust mechanism, keeping depositors money safe.
  • The Reserve Bank of India has been provided more powers regarding regulation of cooperative banks.
  • The limit for Non-Banking Financial Companies (NBFCs) to be eligible for debt recovery under the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest (SARFAESI) Act, 2002 is proposed to be reduced from ₹ 500 crore to asset size of ₹ 100 crore or loan size from existing ₹ 1 crore to ₹ 50 lakh.

NIRVIK

  • Niryat Rin Vikas Yojana.
  • To achieve higher export credit disbursement.
  • Reduction in premium for small exporters.
  • Simplified procedure for claim settlements.
  • Higher Insurance Coverage.
  • Expected to support export of around ₹ 30 lakh crore in 5 years.

Examrace Team at Aug 20, 2021