A half-hearted intervention

CREDITS FOR BOOSTING HEALTH & TOURISM SECTOR

Udayan Hazarika

(The writer can be reached at udayanhazarika@hotmail.com)

It is now a fact that India was never ready to face the so-called second wave of the pandemic. It came over suddenly while the policymakers and executors were rejoicing their success in respect of the first wave. There was chaos in almost all areas right from the availability of hospital beds, ICU facilities, testing kits and oxygen where the judiciary had to intervene from time to time. In one such intervention last month, while examining the centre's preparedness for the much talked third wave, despite the centre's desperate attempt, the Court was not convinced about the preparedness shown and the Court had to order that "Prepare today to handle stage 3 of Covid. Children may be affected during the third wave, ensure vaccination of children. Bolster your infrastructure to deal with the third wave, rope in NEET aspirants and nurses". It took the Centre more than a month to come up with the proposal which it announced on 28th June for complying with the order of the Apex Court.

The proposal came out with a Rs 73,000 crore stimulus package for the health sector of which Rs 23,200 crore for public healthcare and Rs 50,000 crore a loan guarantee for private health care. The new scheme for public healthcare proposed to focus on short-term emergency preparedness with an emphasis on children and paediatric care augmenting manpower, engaging medical students (interns, residents, final year students) nursing students, enhance ICU beds and oxygen supply at various central, district and sub-district levels, ensure adequate availability of equipment, medicines, making provision for

teleconsultations, ambulance services, enhanced testing capacity and supportive diagnostics and strengthening capacity for surveillance and genome sequencing. The remaining Rs 50,000 crore is for implementing a credit guarantee scheme. Justifying this allocation, the FM Sitaraman revealed that this is only the replication of a similar scheme that was implemented in FY 21 with a funding size of Rs 15,000 crore.

However, the result was astounding as it yielded 25-fold increases in Covid dedicated hospitals, setting up of 7,929 Covid healthcare centres, 9,954 Covid care centres, 7.5 times increase in oxygen supported beds, 42-fold increases in isolation beds and a 45-fold increase in ICU beds. Some components of the scheme are undoubtedly essential like engaging the HR in the care centres which will, on one hand, cater for the dire needs of HR in the area to some extent and at the same time will lead to employment generation and enhance private consumption. But the core area concerning setting up of Covid healthcare centres needs a thorough revision as these are usually set up without making any provision for taking care of the accompanying ailments of the Covid patients. In absence of these facilities, the centres are merely serving only those who have no co-morbidities. The government must keep in mind that even while raising such short term facilities, minimum arrangements for treatment of accompanying diseases of the Covid patients should be made as most of the patients are aged and suffer from various comorbidities.

The Rs 50,000-crore credit guarantee scheme by the National Credit Guarantee Trustee Company (NCGTC) is targeted for up-scaling medical infrastructure, especially in underserved areas by way of expansion and new projects related to health/medical infrastructure in cities other than eight metropolitan cities. The guarantee coverage will be 50 per cent for expansion & 75 per cent for new projects. In the districts where the scheme of 'aspirational districts' are underway, guarantee cover will be 75 per cent for both new projects and expansion of existing projects. Under the scheme, the maximum loan could be availed to the extent of Rs 100 crore and the guarantee duration will be up to 3 years. The interest rate on these loans will be capped at 7.95 per cent against 10-11 per cent annual rates in the market. This is a long=term project and as the first quarter of the FY 22 is already over, by the time the budget provision is made for making available the fund, the second quarter will also be over. Thus, only the minimum initial works would be possible for availing the loans in the current year. The scheme will be carried over to the next year and in most probable cause to the FY 24 also. By the time these facilities will be functional, no one knows the shape and size in which Covid would appear. Hence, the Government must lay down appropriate guidelines so that these facilities can provide multipurpose treatment to the Covid patients.

This credit guarantee scheme has another component which is also a new scheme. The scheme is proposed to be implemented in areas other than health for which the total fund earmarked is Rs 60,000 crore and the interest rate is capped at 8.25 per cent per anum. Under this scheme, the government propose to revamp the microfinance institutions which have suffered badly due to lockdown. Government offers to facilitate credit flow to 25 lakh borrowers of microfinance institutions. Narrating the scheme, the FM said that the government would provide a guarantee to scheduled commercial banks for loans to NBFCs-MFIs for lending up to Rs 1.25 lakh each to 25 lakh small borrowers. The main focus will be on fresh lending and not repayment of old loans. Loans from banks are to be capped at MCLR plus 2%. Maximum loan tenure will be 3 years, and 80% of assistance to be used by MFI for incremental lending. Interest rates will be at least 2% below the maximum rate prescribed by RBI. The scheme is open for all borrowers including defaulters up to 89 days. The FM Sitharaman said, "Stressed loans will also be covered, only NPAs would not be covered." Considering the present precarious situation of the microfinance borrowers, the offered credit facility of Rs 1.25 lakh would in no way be a relief as it would not help in repayment of their loans which is piling up since the last lockdown. The major problem concerning the MSMEs today is the repayment of previous loans. Fresh borrowing at this point is not in any way on their agenda.

Another new scheme within the package is for revamping the tourism sector which was completely shattered due to lockdown in the last year and the sector remained paralysed even today. Under this scheme, Government proposes to support 11,000 tourist guides or tourism stakeholders with working capital or personal loans to restart their business. The loan would be provided under the new loan guarantee scheme and will neither involve any processing charge or additional collateral requirements. However, the scheme will be available only to the regional level tourist guides having recognition of both the Ministry of Tourism and the state governments. 10,700 such tourist guides have already been identified. The loan would be provided with a 10 per cent guarantee up to the limits of (a) Rs 10 lakh for Travel and Tourism Stakeholders and (b) Rs 1 lakh for tourist guides licensed at the regional or state level.

Considering the extent of the collapse of the tourism sector is experiencing, both the schemes as proposed by the Government are petty schemes that cannot help revamping the sector. States alone can take up such schemes. Both the tourism schemes reveal either the government's pathetic financial condition or their half-hearted attempt.