Monday's announcement by Nirmala Sitharaman, Finance Minister, of Rs 1.5 lakh crore of additional credit to small businesses, more funding for the healthcare sector and loans to tourist agencies and guides as part of a credit-led package designed to support the economy hit by the pandemic.According to a report, the latest credit push for pandemic-hit industries and other relief support will have an additional 60bps impact on fiscal deficit and offer banks an additional liquidity window of Rs. 70,000 crore.Monday's announcement by Nirmala Sitharaman, Finance Minister, of Rs 1.5 lakh crore of additional credit to small businesses, more funding for the healthcare sector and loans to tourist agencies and guides as part of a credit-led package designed to support the economy hit by the pandemic.Together with previous packages, the package consists mainly of guarantees by the government to banks and microfinance organizations for loans they extend in the affected sectors.According to SBI Research, banks could receive a capital relief of approximately Rs 7,500 crore if they assume equal distribution of the announcement of Rs 1.10 crore crore. This is in addition to 50 per cent and 75% guarantee coverages and a risk weight around 100 percent. This can help them generate credit worth around Rs 70,000 crore.Because a large portion of the package contains contingent liabilities, the fiscal impact of recent announcements and previous ones is not linear. These are ignored and the immediate impact will be slightly more than Rs 1.23 lakh crore, which will be approximately 0.6% of the GDP, Soumya Kanti, chief economist at SBI, stated in the report.COVID-19 Vaccine Commonly Asked Questions View More How does a vaccine function? The vaccine mimics a natural infection. A vaccine induces an immune response that protects people against future COVID-19 infections. It also builds herd immunity quickly to end the pandemic. A vaccine induces immunity in a sufficient number of people to prevent the spread of a disease from person-to-person. Good news is that the SARS-CoV-2 virus was relatively stable which makes it more likely that a vaccine will be developed. There are many vaccines. There are four main types of vaccines. One is a vaccine that is based on the entire virus. Two are vaccines that use a benign virus to carry the antigen of SARS.CoV. Three are nucleic-acid vaccines with genetic material such as DNA and RNA of the antigens. Four are protein subunit vaccines, which contain the recombinant protein of SARS.COV-2 and an adjuvant (booster). How long does it take for a vaccine to be developed? The process of developing a vaccine is complex and long. Vaccines are not given to patients with a specific disease, but are administered to healthy people as well as to vulnerable groups such children and pregnant women. It is mandatory to undergo rigorous testing. Although five years is the fastest time to develop a vaccine, it often takes twice as long or more. See moreMonday's announcement focuses on four areas: tourism, agriculture, MFIs, and health. He said that the other measures will be used to refine the existing arrangements.Credit guarantee schemes will provide guarantees to banks to finance loans to existing or new NBFC-MFIs, or MFIs that lend up to Rs 1.25 crore to approximately 25 lakh small borrowers. These loans will have an interest rate cap of MCLR plus 2.5%.Although most of the announcements are extensions of past packages, it is still a timely relief for the sectors/segments most affected by the second pandemic.The report stated that the Rs. 50,000 crore guarantee package, which is designed to improve the medical infrastructure in the underserved areas of the 124 aspirational district, could lead to an overall improvement in human developmental.According to MSME website, there are currently 124 districts that are recognized as aspirational. The maximum loan amount under the scheme is Rs 100 crore. There is a 7.95 percent interest rate cap and a three-year guarantee.
