19. MINISTRY OF FINANCE

on
  • 19.1. PRADHAN MANTRI GARIB KALYAN YOJANA
  • Insurance scheme for health workers fighting COVID-19
    • It covers public healthcare workers like Safai karamcharis, nurses, ASHA workers, paramedics, technicians, doctors etc. working in Central/State governmental hospitals or health/ wellness centres.
    • Around 22.12 lakh health workers
    • 50 lakh insurance cover is provided for 90 days in case any health professional, who while treating Covid-19 patients meet with some accident or is at some risk of being impacted.
    • Any private healthcare provider requisitioned by hospitals related to any government, for COVID-19 related responsibilities, will also be covered subject to numbers indicated by Ministry of Health & Family Welfare.
    • This benefit will be over and above any other insurance cover being availed of by the beneficiary.
  • PM Garib Kalyan Ann Yojana
    • Poor households getting benefits from PDS
    • 80 crore
    • Free 5kg of wheat or rice per person per month over and above present entitlement under PDS which is 5kg wheat or rice. Also, Free 1 kg of pulses per family
  • PM-Kisan
    • Farmers
    • 8.7 crore
    • Transfer of Rs. 2000 in April
  • Cash transfers under PM Garib Kalyan Yojana
    • MGNREGA workers
      • 13.62 crore families
      • Wage hiked to 202 from 182 w.e.f. April 1. Each worker to get Rs. 2000 additional
    • All women covered under PM Ujjwala Yojana
      • 8.3 crore families
      • Free gas cylinders for April-June
    • Women account holders
      • 20.40 crore women
      • Rs. 500/month for April-June
    • Poor, senior citizens, widows, Divyangs
      • 3 crore
      • Ex-gratia of Rs. 1000/month during April-June
    • Organizations with up to 100 employees, out of which 90% are having wage less than Rs. 15000/month
      • 80 lakh employees
      • Contributory share of 12 % each by employee and employer to be deposited by Government for April-June
    • SHGs
      • 63 lakh SHGs benefiting 6.85 crore households
      • Limit for collateral free loan raised to Rs 20 lakh from Rs 10 lakh
    • Other components of PM Garib Kalyan package
    • Workers registered under EPF
      • 4.8 crore workers
      • EPF Regulations will be amended to include Pandemic as the reason to allow non-refundable withdrawal up to 75% of three months wages, whichever is lower
    • Building and Other Construction Workers
      • 3.5 Crore registered workers
      • Under Building and Other Construction Workers (BOCW) Act, 1996 all States/UTs were advised to transfer funds in the account of construction workers through DBT mode from the Cess fund collected and constituted by the BOCW Welfare Boards under the BOCW cess Act, 1996.
      • Workers should be registered under Building and Other Construction Workers Welfare Fund (cess fund) to avail the benefit.
    • States where PMKKKY is undergoing
      • District Mineral Fund (DMF) funds will be utilized for supplementing and augmenting facilities of medical testing, screening as well as treating the patients affected with this pandemic. 
  • 19.2. NATIONAL PENSION SYSTEM
    • • To provide retirement income to all the citizens.
    • • To institute pension reforms and to inculcate the habit of saving for retirement amongst the citizens.
    • NPS is applicable to:
      • All Indian citizens of India, resident or non-resident and OCIs (added recently) till the age of 65 years.
      • All new employees of Central Government service (except Armed Forces) and Central Autonomous Bodies joining Government service on or after 1st January 2004.
      • All the employees of State Governments, State Autonomous Bodies joining services after the date of notification by the respective State Governments.
      • Any other government employee who is not mandatorily covered under NPS can also subscribe to NPS
      • All citizens i.e., private employees and unorganized sector workers.
      • Non Resident Indians (NRIs) with bank accounts in India
    • administered by Pension Fund Regulatory and Development Authority (PFRDA).
    • Under the NPS, the individual contributes to his retirement account and his employer can also co-contribute.
    • • It is designed on defined contribution basis wherein the subscriber contributes to his account, there is no defined benefit that would be available at the time of exit from the system and the accumulated wealth depends on the contributions made and the income generated from investment of such wealth.
    • • Contributions made towards the NPS are eligible for an additional tax deduction up to ₹50,000. This is over and above the ₹1,50,000 limit of deduction available under sec 80CCD (1) or tax deductions available to individuals who make contributions under NPS.
    • • Government has increased the income tax exemption limit on withdrawal from NPS to 60%, from 40%, on exiting the scheme, effectively making withdrawal from the pension scheme 100% tax-free.
    • • The recordkeeping, administration and customer service functions for all subscribers of the NPS are being handled by the National Securities Depository Limited (NSDL), which is acting as the Central Recordkeeper for the NPS.
    • • The subscriber will be allotted a unique Permanent Retirement Account Number (PRAN) which is portable and can be used from any location in India.
    • • PRAN will provide access to two personal accounts:
      • o Tier I Account: This is a non-withdrawable account meant for savings for retirement.
      • Tier II Account: This is simply a voluntary savings facility. The subscriber is free to withdraw savings from this account whenever subscriber wishes. No tax benefit is available on this account.
    • • NPS returns are market linked. It offers 3 funds to subscribers: Equities, Corporate Bonds, Government Securities.
    • • Subscriber can exit from NPS after 10 years of account opening or attaining 65 years of age whichever is early.
    • • EEE tax status (tax exempt at entry, investment, and maturity) for the NPS (earlier it was EET) has been given.
    • • Apart from partially withdrawing money for exigencies like health, marriage, house and education, subscriber can also withdraw 25 percent of the contributions after three years of joining for skill development activity like startups, new ventures. 
  • 19.3. PRADHAN MANTRI MUDRA YOJANA
    • Increasing access of finance to the unbanked but also bring down the cost of finance from the last Mile Financers to the micro/small enterprises, most of which are in the informal sector.
    • Any Indian Citizen who has a business plan for a non-farm sector income generating activity such as manufacturing, processing, trading or service sector and whose credit need is less than Rs 10 lakh.
    • • For implementing the Scheme, government has set up an NBFC named, Micro Units Development & Refinance Agency Ltd (MUDRA).
    • • MUDRA loans are extended by banks, NBFCs, MFIs and other eligible financial intermediaries as notified by MUDRA Ltd.
    • • The funding support from MUDRA are of two types:
      • o Micro Credit Scheme (MCS) for loans up to 1 lakh finance through MFIs.
      • o Refinance Scheme for Commercial Banks / Regional Rural Banks (RRBs) / Small Finance Banks / Non-Banking Financial Companies (NBFCs).
    • • The present authorised capital of MUDRA is at Rs. 5000 crore with a paid up capital of Rs.1675.93 crore. RBI has allocated an amount of Rs 20,000 crore from Priority Sector shortfall of Commercial Banks for creating a Refinance Corpus Fund.
    • • 3 types of loans to be allotted by micro units’ development and refinance agency bank are:
      • o Shishu: covering loans upto Rs. 50,000
      • o Kishor: covering loans above Rs. 50,000 and upto 5 lakhs
      • o Tarun: covering loans above Rs. 5 lakh and upto 10 lakhs
    • • There is no subsidy for the loan given under PMMY. However, at present, MUDRA extends a reduction of 25bps in its interest rates to MFIs / NBFCs, who are providing loans to women entrepreneurs.
    • • Banks have been mandated by RBI not to insist for collateral security in the case of loans upto 10 lakh extended to the units in the Micro Small Enterprises sector.
    • • To mitigate the issue of collateral and to provide comfort to the lending institutions, a Credit Guarantee Product is extended by creation of a Fund called “Credit Guarantee Fund for Micro Units” (CGFMU).
      • o The Scheme is being managed by National Credit Guarantee Trustee Company Ltd. (NCGTC), an agency promoted by the GOI.
    • • MUDRA Card is a debit card issued against the MUDRA loan account. The borrower can make use of MUDRA Card in multiple drawals and credits, so as to manage the working capital limit in cost-efficient manner and keep the interest burden minimum. 
  • 19.4. ATAL PENSION YOJANA
    • The subscribers would receive the fixed minimum pension at the age of 60 years, depending on their contributions.
    • • Open to all Indians between the age of 18 and 40 having a savings bank account in a bank or post-office. Therefore, minimum period of contribution by any subscriber under APY would be 20 years or more.
    • • It is mainly focused on citizens in unorganized sector.
    • • The Central Government co-contribute 50% of the total contribution or Rs. 1000 per annum, whichever is lower, to each eligible subscriber account, for a period of 5 years, who join the NPS between the period 1st June, 2015 and 31st December, 2015 and who are not members of any statutory social security scheme and who are not income tax payers.
    • • Under the APY, subscribers would receive a fixed minimum pension of Rs. 1000 to Rs. 5000 per month, at the age of 60 years, depending on their contributions, which itself would vary on the age of joining the APY.
    • • It replaced the Swavalamban scheme.
    • • Subscribers can voluntarily exit before the age of 60 years from APY subject to certain conditions, on deduction of Government co-contribution and return/interest thereon.
    • • In case of premature death of subscriber (death before 60 years of age), spouse of the subscriber can continue contribution to APY account of the subscriber, for the remaining vesting period, till the original subscriber would have attained the age of 60 years.
    • • The minimum period of contribution by the subscriber under this would be 20 years or more.
    • • In case of death of subscriber, the spouse of the subscriber shall be entitled for the same amount of pension till his or her death.
    • • After the death of both the subscriber and the spouse, the nominee of the subscriber shall be entitled to receive the pension wealth, as accumulated till age of 60 years of the subscribe
    • • It is administered by the Pension Fund Regulatory and Development Authority. The Institutional Architecture of NPS would be utilised to enroll subscribers under APY. 
  • 19.5. PRADHAN MANTRI SURAKSHA BIMA YOJANA
    • It is a one year cover Personal Accident Insurance Scheme, renewable from year to year, offering protection against death or disability due to accident.
    • Available to citizens (including NRIs) in the age group 18 to 70 years having a bank account.
    • • Premium payable is Rs.12/- per annum per member.
    • • Risk coverage available will be Rs. 2 lakhs for accidental death and permanent total disability
    • • Rs. 1 lakhs for permanent partial disability
    • • Individuals who exit the scheme at any point may re-join the scheme in future years by paying the annual premium
    • • The scheme is offered/administered through Public Sector General Insurance Companies (PSGICs) and other general insurance companies.
    • • Government has converged the social security schemes of Aam Aadmi Bima Yojana (AABY) with Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY) and Pradhan Mantri Suraksha Bima Yojana (PMSBY) to provide life and disability coverage to the unorganised workers depending upon their eligibility. 
  • 19.6. PRADHAN MANTRI JEEVAN JYOTI BIMA YOJANA
    • • A one year life insurance scheme renewable from year to year.
    • • Offering coverage for death due to any reason
    • • Available to citizens (including NRIs) in the age group of 18 to 50 years.
    • • Subject to annual renewal, benefits are available till the age of 55(entry, however, will not be possible beyond the age of 50 years).
    • • It provides coverage of Rs. 2 lakh in case of death due to any reason. It charges an annual premium of Rs. 330.
    • • Risk cover under PMJJBY is applicable only after the first 45 days of enrolment.
    • • It is offered / administered through LIC and other Indian private Life Insurance companies. 
  • 19.7. PRADHAN MANTRI VAYA VANDANA YOJANA (PMVVY)
    • To provide social security during old age and protect elderly persons against a future fall in their interest income due to uncertain market conditions.
    • Elderly persons aged 60 years and above
    • • It will provide an assured pension based on a guaranteed rate of return of 8 per cent for 10 years, with an option to opt for pension on a monthly / quarterly / half yearly and annual basis.
    • • Union cabinet approved extending the investment limit from Rs 7.5 lakhs to Rs 15 lakhs as well as extension of time limits for subscription from 4th May 2018 to 31st March, 2020.
    • • It will be implemented through Life Insurance Corporation of India (LIC).
    • • The difference between the return generated by LIC and the guaranteed 8 percent interest would be compensated through the subsidy given to LIC.
    • • The scheme also allows for premature exit only for the treatment of any critical/ terminal illness of self or spouse.
    • • On death of the Pensioner during the policy term of 10 years, the Purchase Price shall be refunded to beneficiary.
    • • Loan facility is available after completion of 3 policy years. The maximum loan that can be granted shall be 75% of the Purchase Price.
    • • No tax benefits are available. 
  • 19.8. PRADHAN MANTRI JAN-DHAN YOJANA (PMJDY)
    • To ensure comprehensive financial inclusion of all the households in the country by providing universal access to banking facilities with at least one basic bank account to every household, financial literacy, access to credit, insurance, remittance and pension facility.
    • • Account can be opened in any bank branch or Business Correspondent (Bank Mitr) outlet.
    • • It focuses on coverage of households as against the earlier plan which focused on coverage of villages. It focuses on coverage of rural as well as urban areas. Any individual above the age of 10 years can open Basic Savings Bank Deposit Account (BSBDA) Account.
    • • Special Benefits under PMJDY Scheme include:
      • o No minimum balance required.
      • o The scheme provides life cover of Rs. 30,000/- payable on death of the beneficiary, subject to fulfillment of the eligibility condition.
      • o Beneficiaries of Government Schemes will get Direct Benefit Transfer in these accounts.
      • o Overdraft facility upto Rs.10000/- is available in only one account per household, preferably lady of the household after satisfactory operation of the account for 6 months. There will not be any conditions attached for OD upto Rs 2,000.
      • o The National Mission for Financial Inclusion (PMJDY) to continue beyond 14.8.2018
      • o Age limit for availing OD facility to be revised from 18-60 years to 18-65 years.
      • o Under the expanded coverage from "every household to every adult", accidental insurance cover for new RuPay card holders to be raised from Rs 1 lakh to Rs 2 lakh to new PMJDY accounts opened after 28.8.18. 
  • 19.9. STAND UP INDIA SCHEME
    • It aims at promoting entrepreneurship among women and scheduled castes and tribes.
    • SC/ST and/or woman entrepreneur, above 18 years of age.
    • • It facilitates bank loans between Rs 10 lakh and Rs 1 Crore to at least one Scheduled Caste (SC) or Scheduled Tribe (ST) borrower and at least one woman borrower per bank branch for setting up a greenfield enterprise. This enterprise may be in manufacturing, services or the trading sector.
    • • In case of non-individual enterprises at least 51% of the shareholding and controlling stake should be held by either an SC/ST or woman entrepreneur.
    • • Borrower should not be in default to any bank/financial institution.
    • • It covers all Scheduled Commercial banks.
    • • Borrower shall be required to bring in minimum of 10% of the project cost as own contribution.
    • • The rate of interest would be lowest applicable rate of the bank for that category (rating category) not to exceed (base rate (MCLR) + 3%+ tenor premium).
    • • Provision of handholding support is available under the scheme, in case borrower is a Trainee Borrower. The offices of SIDBI and NABARD are designated as Stand-up Connect Centres, who will arrange for the support required. SIDBI is a refinancing agency.
    • • Besides primary security, the loan may be secured by collateral security or guarantee of Credit Guarantee Fund Scheme for Stand-Up India Loans (CGFSIL) as decided by the banks.
    • • The loan is repayable in 7 years with a maximum moratorium period of 18 months.
    • • It also provides for Creation of a credit guarantee mechanism through the National Credit Guarantee Trustee Company (NCGTC) 
  • 19.10. GOLD MONETIZATION SCHEME
    • • To mobilise gold held by households and institutions of the country and facilitate its use for productive purposes, and
    • • In the long run, to reduce country’s reliance on the import of gold.
    • • To provide a fillip to the gems and jewellery sector in the country by making gold available as raw material on loan from the banks.
    • • The scheme allows banks’ customers to deposit their idle gold holdings for a fixed period in return for interest in the range of 2.25-2.50%.
    • • Recently RBI made changes, the scheme could now be availed by charitable institutions, the central government, the state government or any other entity owned by the central government or the state government, apart from individual and joint depositors.
    • • Scheme provides different options to the people to monetize the gold, by modifying the already existing two schemes, namely 'Revamped Gold Deposit Scheme' and the 'Revamped Gold Metal Loan' scheme.
    • • All scheduled commercial banks (excluding RRBs) have been allowed to implement the scheme.
    • • The minimum deposit at any one time shall be 30 grams of raw gold (bars, coins, jewelry excluding stones and other metals). There is no maximum limit for deposit under the scheme.
    • • The deposits can be made for a short-term period of 1-3 years; a medium-term period of 5-7 years and a long-term period of 12-15 years. (minimum tenure is one year)
      • o The principal and interest on short term deposits shall be denominated in gold. In the case of medium and long term deposits, the principal will be denominated in gold. However, the interest shall be calculated in Indian Rupees with reference to the value of gold at the time of the deposit.
      • o The difference between the current borrowing cost for the Government and the interest rate paid by the Government under the medium/long term deposit will be credited to the Gold Reserve Fund.
      • o Tax exemptions under the GMS include exemption of interest earned on the gold deposited and exemption from capital gains made through trading or at redemption.
    • Earlier, customers had to first approach the collection and purity testing centres (CPTCs) which issued depositors purity certificate on gold deposited. RBI has recently liberalized this rule and Banks may accept the deposit of gold at designated branches at their discretion. 
  • 19.11. SOVEREIGN GOLD BOND SCHEME
    • Reducing the demand for physical gold by shifting a part of the estimated 300 tons of physical bars and coins purchased every year for Investment into gold bonds.
    • • Sovereign Gold Bonds will be issued on payment of rupees and denominated in grams of gold.
    • • Bonds will be issued on behalf of the Government of India by the RBI. Thus, the Bonds will have a sovereign guarantee.
    • • These bonds are sold through scheduled commercial banks (except RRBs, Small Finance Banks and Payment banks), Stockholding Corporation of India Ltd., SEBI authorised trading members, designated post offices and stock-exchanges.
    • • The Bonds shall be denominated in units of one gram of gold and multiples thereof.
    • • The bond would be restricted for sale to resident Indian entities.
    • • The investment limit per fiscal year has been increased to 4 kg for individuals, 4 Kg for Hindu Undivided Family (HUF) and 20 Kg for Trusts and similar entities notified by the Government from time to time.
    • • The Government will issue bonds with a rate of interest which will be calculated on the value of the gold at the time of investment.
    • • Bonds will be available both in demat and paper form.
    • • The tenor of the bond could be for a minimum of 5 to 7 years.
    • • Bonds can be used as collateral for loans.
    • • Bonds to be easily sold and traded on exchanges to allow early exits for investors who may so desire.
    • • On maturity, the redemption will be in rupee amount only which would not be a fixed sum, but linked to the price of gold.
    • • The deposit will not be hedged and all risks associated with gold price and currency will be borne by Gol through the Gold Reserve Fund. 
  • 19.12. SWACHH BHARAT KOSH (SBK)
    • To attract Corporate Social Responsibility (CSR) funds from Corporate Sector and contributions from individuals and philanthropists to achieve the objective of Clean India (Swachh Bharat) by the year 2019.
    • • It would be administered by a Governing Council chaired by Secretary, Department of Expenditure.
    • • Donations to the “Swachh Bharat Kosh”, other than the sums spent for “Corporate Social Responsibility” are eligible for 100% deduction under section 80G of the Income-tax Act, 1961. This is applicable to the assessment year 2015-16 and subsequent years.

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