FM Nirmala Sitharaman today shared the first installment of the mega 20 lakh crore package with a focus on giving relief to the MSME sector.
The Prime Minister, during his national address on Tuesday, announced the Atmanirbhar India package focusing on making India self-reliant.
The finance minister, who was flanked by MOS Anurag Thakur and finance ministry officials, said that self-sufficient India rests on five pillars: economy, infrastructure, technology-driven systems, demographics and demand. Factors of production will focus on: land, labor, liquidity and law. It aims to make local brands global.
key takeaways:
Six major steps for revival of MSME sector
- Collateral free loan of Rs 3 lakh crore for MSMEs. This will benefit 45 lakh units so that they can resume work and save jobs.
- For stressed MSMEs, a subordinate loan provision of Rs 20,000 crore has been announced for 2 lakh MSMEs. This will benefit those who are NPAs or stressed MSMEs.
- An equity infusion of Rs 50,000 crore through the Mother Fund-Daughter Fund for MSMEs, which is viable but needs handholding. A fund with a corpus of Rs 10,000 crore will be set up to expand the capacity of these units and help market them on selection.
- The definition of MSMEs has been modified to allow MSMEs not to lose profits. Also, there will be no difference between manufacturing and service sector MSMEs.
- Global tenders up to Rs 200 crore for government contracts will be canceled.
- This will ensure that e-market linkages are provided across the board in the event of COVID not participating in trade fairs. Government of India and PSUs will clear all receipts in the next 45 days.
For employees
- Liquidity relief of EPF assistance of ₹ 2,500 crore is being given to all EPF establishments, EPF contribution will be paid by the government. More than 72 lakh employees from India will benefit for another 3 months till August.
- Statutory EPF contribution for all organizations and their employees covered by EPFO has been reduced from 12% to 10%. It does not apply to government organizations. This will create liquidity of Rs 6,750 crore in these organizations.
For NBFC / HFC / MFI
- Rs 30,000 crore special liquidity scheme for investment in investment grade letter of credit of NBFCs, HFCs and MFIs. These NBFCs are also funding MSMEs. This will be fully guaranteed by the Government of India.
- Partial Credit Guarantee Scheme 2.0 of Rs 45,000 crore for NBFCs. The first 20% loss will be borne by the guarantor which is the Government of India.
- For DISCOM, a lump sum emergency liquidity injection of Rs 90,000 crore against all their receipts. States will guarantee this.
Other information
- Extension of up to 6 months (without cost to the contractor) by all central government agencies like Ministry of Railways, Road Transport and Highways, Central Public Works Department.
- On immovable property, the Ministry of Urban Development will issue advisories to the States / UTs, so that the regulators can negotiate for the force. Regulators may extend completion / registration dates for projects ending on or after March 25, 2020 by six months.
- Reduction of 25% of the existing tax rates on Source (TDS) and Tax Collection at Source (TCS) from yesterday to 31 March 2021. It will release Rs 50,000 crore.
- Due date for filing all income tax returns was extended from 31 July to 30 November. Vivad to Vishwas scheme extended to 31 December 2020. The taboo dates were extended to December 31, 2020 as of September 30, 2020. By 31 March 2021, the taboo dates were extended to 30 September 2021.
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