Finance Minister Nirmala Sitharaman on Wednesday gave details of the Rs 20-trillion package, which PM Modi spoke about a day before in a address to the nation. Well, the package aims to support the economy battered by lockdown to contain the coronavirus pandemic.
6 Measure were for for MSMEs
1. First for standard MSMEs
She announced Rs 3 lakh crore collateral-free automatic loans for small and mid-sized businesses four years. There will be no principal repayment for 12 months. 100% credit guaranteed and is available till Oct 31, 2020. This will benefit 4.5 million units
2. Then, for stressed MSMEs
FM announced Rs 20,000 crore worth of subordinate debt-based scheme, 200,000 units to benfit by this.
3. Next is For viable MSMEs
Fund of fund to be created to infuse Rs 10,000 crore. This for those that are viable MSMEs but need handholding at this hour
This will also help in expanding capacity
4. Well, there is a change in definition of MSMEs
Investment limit that defined an MSME revised upwards to Rs Rs 1 crore from Rs 25 lakh
Now, a company can be categorised as MSME if investment is up to Rs 1 crore, turnover up to Rs 5 crore
Distinction between manufacturing and services MSMEs removed altogether
5. Global tender disallowed in govt procurement for tenders up to Rs 200 crore to provide MSMEs the opportunity to participate in tenders
6. Announcing the sixth measure, Sitharaman said Post-Covid-19, trade fairs and exhibitions will be difficult so e-market linkage will be provided for MSMEs so that they will be able to find their market. And all receivables of MSMEs from CPSEs and other govt enterprises to be cleared within the next 45 days
Now, 2 measures are related to Employees Provident Fund
7. A liquidity relief is being given for all EPF establishments. Govt is giving Rs 2,500 crore liquidity support in the form of 12% employer and 12% employee contribution extended for another three months (June, July and August). 650,000 establishments were benefitted in the first three months. With this 7.22 million employees will be benefited
8. Statutory PF contribution is being reduced from 12% to 10% for both employees and employers for the next three months
And there is no change in employer contribution for govt enterprises. However, employees (both govt and private) have to contribute only 10%
Next is 2 measures related to NBFCs, HFCs and MFIs
9. Rs 30,000-cr special liquidity scheme is provided. Investments will be made in both primary and security markets
Govt will buy investment-grade debt papers of NBFCs, which is fully guaranteed by GoI
10. Partial-guarantee lending scheme
Rs 45,000 cr liquidity infusion given to cover bonds, commercial papers rated AA or below, including unrated papers
11. Coming to measure given for Power Discoms
It is a one-time emergency liquidity injection of Rs 90,000 crore in discoms by PFC and REC against their receivables. In this case state will be issuing guarantees. Discoms has to pay the gencos from the funds so generated and all those receiving money should pass on the benefits to consumers
12. Next is measures for Contractors
All central govt agencies (railways, highways, PWD, etc) to give up to six-month extension to contractors. Well, this extension will cover goods and construction contracts. Concessional periods to also be extended by up to 6 months
Govt agencies to partially release bank guarantees to the extent of the partially complete contracts
13. Measures for Real estate
The urban development ministry to issue advisory to states and UTs so that regulators consider the Covid-19 period an 'act of god'. They will be able to extend all registered projects by up to 6 months. Using the force majeure clause suo motu they can extend registrations and completion dates if these were falling after March 25, 2020. Timelines under RERA also to be extended.
And the last 2 measures are tax related
14. From tomorrow, till March 31, 2021, TDS and TCS rates reduced by 25%. This will release Rs 50,000 cr in the hands of people
15. Lastly, dates were being extended for direct taxes
All pending refunds to charitable trusts, non-corporate businesses — many of them very small — will be given immediately
Due date for all I-T returns for 2019-20 extended to Nov 30, 2020. Date of asssessments getting barred as on September 30, 2020, extended to December 31, 2020. Date of asssessments getting barred as of March 31, 2021, are getting extended till September 30, 2021 and Vivaad se Vishvas: Whole scheme extended till December 31, 2020.
Finance Minister said for the next few days, details will be given out for the PM's self-reliant India.