New pandemic package to raise fiscal deficit by 60 bps, opens Rs 70,000-crore new loan window:

 

New pandemic package to raise fiscal deficit by 60 bps, opens Rs 70,000-crore new loan window: Report

PTI

 

JUN 29, 2021 / 01:34 PM IST

 
 
 
 
 

Finance minister Nirmala Sitharaman on Monday announced Rs 1.5 lakh-crore of additional credit for small businesses, more funds for the healthcare sector, loans to tourism agencies and guides, and waiver of visa fees as part of a credit-led package to support the pandemic-hit economy.

Finance minister Nirmala Sitharaman on Monday announced Rs 1.5 lakh-crore of additional credit for small businesses, more funds for the healthcare sector, loans to tourism agencies and guides, and waiver of visa fees as part of a credit-led package to support the pandemic-hit economy.

The latest credit push for the pandemic-hit sectors and other relief supports will have an additional 60 bps impact on the fiscal deficit, and can offer an additional liquidity window of Rs 70,000 crore to banks, says a report.

Finance minister Nirmala Sitharaman on Monday announced Rs 1.5 lakh-crore of additional credit for small businesses, more funds for the healthcare sector, loans to tourism agencies and guides, and waiver of visa fees as part of a credit-led package to support the pandemic-hit economy.

The package, mostly made up of government guarantees to banks and microfinance institutions for loans they extend to the pandemic-hit sectors, totals up to Rs 6.29 lakh crore together with the previous such packages.

Assuminged equal Distributionof the new announcement of Rs 1.10 lakh crore, with 50 per cent and 75 per cent guarantee cover and a risk weight of 100 per cent, banks may have a capital relief of around Rs 7,500 crore that can further generate credit of around Rs 70,000 crore, according to an SBI Research analysis.