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A day after, when the finance minister, Nirmala Sitharaman announced significant relief measures for the poor and weaker sections of the society, the RBI has came up with some measures in order to boost the economy which is going through a slump these days. Before starting the announcement, the RBI governor said that the whole world is going to see a major recession and India is not immune to it and these measures are a response to counter it to some extent. To know how these remedial measures will benefit the common man, keep reading this post.

RBI Announcements on 27th March 2020 and its impact on common public 

In the wake of the recent Coronavirus scare, the RBI has come up with following announcements in order to give some respite to the people. Below are the various points along with their impact on the common public of India

Announcement 1- Repo rate cut

After consulting the monetary policy committee, the RBI governor has announced a repo rate cut by 75 basis points. It means the new repo rate is now 4.40%. Remember when a commercial bank borrows money from the RBI, in return, it gives an interest to the central bank, which is known as repo rate. Now, when the repo rate is lowered down, the existing borrowers will be benefited from this, as their existing loans will get cheaper and their EMIs burden will get lower.

Announcement 2 - 3-month moratorium period on 

RBI has allowed a moratorium period of 3 months on the payment of instalment in respect to the outstanding loans, as on 31st March 2020. This means that lending institutions can't compel borrowers to make payments of the outstanding loans. And at the same time, the RBI has assured the lending institution that their funds are secured.

Announcement 3 - No EMIs deduction

Since most of the borrowers enjoy a facility of auto-debit for the instalments of a particular loan, now, they don't need to panic because, under the moratorium period, lending institutions can't deduct EMIs from the borrower's account.

Announcement 4 - No late fees on missed EMIs

Borrowers are also worried that if they don't pay the loan instalments for three months, the banks will charge a penalty fee. But  RBI has assured the borrowers that they don't need to scare as they have directed lending institutions to not to charge any kind of delinquent payment fees. Further, the late payment will not influence the individual's credit score and they will get an extended repayment tenure of up to 3 months.

Announcement 5 - Interest-free working capital repayments

People who borrow in the form of cash credit or overdraft facility, they don't need to pay any kind of interest on the working capital repayments. Further, late payments will not be treated as default and lending institutions can't downgrade the borrower's asset.

Announcement 6 - Reduction in CRR

RBI has also announced 100 basis points reduction in the cash reserve ratio to infuse liquidity in the system.  Remember, earlier the cash reserve ratio was at 4 per cent which now stands as 3 per cent after the reduction. By various other means, RBI wants to ensure 3.7 lakh crore into the system. 

Announcement 7 - Working capital interest

The three-month interest moratorium will also be applicable to all lending institutions.

On 26th March, Finance Minister, Mrs Nirmala Sitharaman announced an economic relief package to the poor section of the society. Remember, under the lockdown situation the underprivileged sections are taking the worst hit. Under Pradhan Mantri Garib Kalyan Yojna, a sum of Rs 1.70 lakh crores is announced. Here a list of things which will be addressed by using these funds:

Highlights of Pradhan Mantri Gareeb Kalyan Yojna

• A relief package Rs 1.70 crores are announced by the Finance Minister for different sections of the society. 
• Medical staff, health workers who are treating Covid-19 infected patients will be provided with an insurance cover of Rs 50 lakh for each individual.
• From April 1st, 2020, about 80 crores people will get an additional 5 Kg wheat or rice for the next three months for free. The scheme will reach destitute people via the PDS (Public Distribution System).
• Under the Kisan Samman Nidhi Yojna, almost 8.69 crores farmers get Rs 6000 annually. Now the government is planning to transfer the first instalment of Rs 2,000 in the first week of April 2020.
• About 5 crores families are dependent on the MNREGA Scheme which earlier used to get a daily wage of Rs 182. Now, the wage has been increased up to Rs 202.
• The government has announced an additional pension for elderly, widows, and divyang(Handicapped) of Rs 1,000. The pension will be provided in two instalments.
• 20 crore women having Jan Dhan Account will get Rs 500 per month for the next three months.
• 8 crore BPL families enrolled in Ujjwala Scheme will get 3 LPG cylinders for free for the next 3 months. 
• Self Help Groups will be entitled to get a collateral-free loan up to Rs 20 lakh under the Deen Dayal Upadhyay Yojna. Earlier the maximum limit of the loan was Rs 10 lakh.
• The government will bear the burden of paying EPF (Employer's 12% + Employee's 12%) for the organization. However, the organizations having less than 100 employees out of which 90% of their employees earning less than Rs 15,000 can benefit from the scheme. Remember, the relief will be provided for the next three months.
• Employees working in the organized sector are allowed to withdraw either 75% of the available credit or 3 months’ salary from their EPFO account. 
• State governments are allowed to use the construction fund of Rs 31,000 crore for the benefit of 3.5 crores registered construction workers. 
• State governments are directed to use the District Mineral Fund for the check-up and diagnosis of the Covid-19 infected patients.

Announcement by FM on 24th March

On 24th March 2020, in the afternoon Finance Minister announced some relief measures. Here are the highlights of the announcement.

•  Last Date to Fill ITR is June 30, 2020
•  Last Date to Link PAN with Aadhar Card is June 30, 2020
• Last Date to File GST Return for March, April, And May Extended to June 30, 2020.
• Maintaining Minimum Monthly Balance (non-maintenance Charges) Waived Off for Three Months
• No Charges on ATM Withdrawals Via Debit Card for The Next Three Months.
• Vivaad se Vishwaas scheme extended by three months.
• Delayed deposits of TDS with a reduced interest rate as 9% will be accepted till June 30, 2020

Announcement by Hon’ble PM on 24th March

24th March 2020 at 8 PM, The Prime Minister, Narendra Modi interacted with people. Remember, this was the 2nd interaction within the five days after the ‘Janata curfew. The Prime Minister announced a complete lockdown in the entire country for 21 days. Here are the few takeaways from the Prime Minister’s speech.

• PM started his speech by stressing on the benefit of social distancing amid the Covid-19 outbreak. He also mentioned that the carelessness of some people can cost many lives. Since people were violating the lockdown put by the various states, he announced a complete lockdown from this midnight. The lockdown will remain for 21 days (3 weeks).
• PM also announced that the complete lockdown will be stricter than the previous lockdown. He also urged people to stay where they are right now.
• The decision of the complete lockdown has come after the suggestion from the health experts. He also drew the attention that if people disobey this 21-day lockdown till 14 April 2020, the country would go 21 years behind.
• Talking about the reason for this complete lockdown, PM mentioned the excerpt from the WHO report which says that one Covid-19 infected person can spread this virus to hundreds of people within a week. Another WHO report says that it took 67 days to infect 1 lakh people, 11 days to next 1 lakh, and next 1 lakh in just four days. The speed of this infection is alarming. 
• In his 30-minute speech he mentioned that despite having the best healthcare services, Italy, Japan, America, Germany, and China are facing difficulties to mitigate the risk of this Covid-19 outbreak. At the same time, he also added that countries who have taken lockdown measures seriously are in a better position. He also annexed that citizens of many countries helped their government completely to break the chain of this pandemic.
• In his historic speech he mentioned a famous Hindi saying, which reads as - if you have life, you have the world (Jaan Hai To Jahan Hai). With both hands joined, the Prime Minister appealed to the citizens of the country that they should keep their promises in these tough times and think about those who are putting their life at risk in these times.
• PM thanked all the people who are indulged in this fight against Covid-19, including Doctors, Nurses, Pathologists, and Media persons who are working constantly to keep us updated.
• PM also stated that Center and State governments are working collaboratively to ensure the availability of adequate supplies of essential items in the country.
• To upgrade the medical facilities, PM announced a fund of Rs 15,000 crore to provide more beds, ICUs, testing facilities, personal health equipment, ventilators, and training the medical staff to fight this pandemic. He also appealed to all the state governments to keep healthcare their priority.
• On the concluding remarks, PM reminded the threat of Covid-19 and not to believe in the fake news weaved around this outbreak.

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