On Tuesday 12th May, 2020 Indian PM Narender Modi said that “the country should view the corona-virus crisis as an opportunity to achieve economic self-reliance.”
Addressing a press conference to unveil the plan that was outlined by the Prime Minister yesterday called it “Aatma Nirbhar Bharat Abhiyan”. And announced ₹ 20 Lakh Crore which is around 10% of GDP in FY 20.
The PM had announced the Aatma Nirbhar Bharat Abhiyan package that will focus on Make in India.
Finance Minister Nirmala Sitharaman today shared the first installment of the mega ₹ 20 lakh crore package with the focus today being on the relief to the MSME sector.
FM Nirmala Sitharaman said, “The plan is to make India confident in its abilities not isolate India from the world. We have the ability to contribute to the world as we have seen recently.”
In also addition she added that the integration to the global value chain is a part of the plan laid by the Prime Minister.The Finance Minister said that” the Aatma Nirbhar Bharat rests on five pillars: Economy, Infrastructure, Technology-driven systems, Demography, and Demand.”
The main focus will be on factors of production: Land, Labour, Liquidity, and Laws.
FM Nirmala Sitharaman said that “After the July budget we met several times and we made sure to address the needs of various sectors that were felt should be addressed and the aim of the government has been to address issues of various sectors since it has come to power.”Key highlights from the Finance Minister’s Conference
- Collateral free loan of ₹ 3 lakh crores for MSMEs. This will benefit 45 lakh units so that they can resume work and save jobs.
- For stressed MSMEs, the subordinate debt provision of ₹ 20,000 crore has been announced for 2 lakh MSMEs. It will benefit those who are NPAs (Non-Performing Assets) or stressed MSMEs.
- ₹ 50,000 crore for MSMEs that are viable but need handholding, a fund of funds with a corpus of ₹ 10,000 crores will help these units expand capacity and help them list on Markets if they choose.
- MSMEs have been revised to allow MSMEs to aim for expansion and not lose benefits. Also, there’ll be no difference between the manufacturing & services sector MSMEs.
- A new definition of MSMEs changed and investment revised upwards. Micro units with investment till ₹ 1 crore, turnover up to ₹ 5 crore. Small units with investment till ₹ 10 crore, turnover up to ₹ 50 crore. Medium units with investment till ₹ 20 crore, turnover up to ₹ 100 crore.
- Stimulus package as announced by the Prime Minister to come in various tranches. The Finance Minister said, “I shall come out beginning today to come out and discuss various tranches that will be a part of the plan laid out by the Prime Minister, making it clear that the stimulus package will come in various parts for various industries.”
- Global tenders will be disallowed up to ₹ 200 crore for government contracts.
- Finance Minister said, “For government procurement, tenders up to ₹ 200 crores will not be on the global route. Global tenders to be disallowed in the government procurement up to ₹ 200 crores. This will make self-reliant India, will also then be able to serve ‘Make in India'”. This will enable MSMEs to do their business with a lot more confidence and supply without a threat of cheaper global products.
- FM Nirmala Sitharaman said, “E-market linkages will be provided to all MSMEs to ensure that they can market themselves in the absence of trade fairs and exhibitions in Post-COVID World.” The Government of India and PSUs will clear all the receivables in the next 45 days.
- Finance Minister: Liquidity relief for all EPF establishments and employees announced. To ease financial stress as businesses, get back to work, the government decides to continue EPF support for business and workers for 3 more months providing a liquidity relief of ₹ 2,500 crore.
- The FM said that “The government announces ₹ 45,000 crore liquidity infusion through a Partial Credit Guarantee Scheme 2.0 for NBFCs. The first 20% loss will be borne by the guarantor which is the Government of India. “Investments permitted in both primary and secondary markets, to buy even investment-quality debt papers. The move will ease the flow of credit.”
- FM Nirmala Sitharaman: In order to provide more take-home salary for employees and to give relief to employers in payment of PF, EPF contribution is being reduced for businesses & workers for 3 months, amounting to liquidity support of ₹ 6750 crores. EPF contribution of ₹ 2,500 crore that will benefit 72.22 lakh employees has been extended till August.
- ₹ 30,000 crore special liquidity scheme for NBFCs, MFIs, and HFCs will be fully guaranteed by the government.
- For cash-starved DISCOMS, the government announces a liquidity injection of ₹ 90,000 crores. This is a one-time provision for infusion of money against their receivables.
- Government agencies will provide an extension of up to 6 months to contractors. Finance Minister said, “In a major relief to contractors, all central agencies to provide an extension of up to 6 months, without cost to contractor, to obligations like completion of work covering construction and goods and services contracts and the agencies can also release partial bank guarantees.”
- Extension of registration and completion date of real estate projects under RERA.
- Urban Development Ministry will advise States/UTs and their Regulatory Authorities to extend the registration and completion date Suo-moto by 6 months for all registered projects expiring on or after 25th March, 2020 without individual applications.
- The due date of all income-tax return for FY 2019-20 will be extended from 31st July, 2020 and 31st October, 2020 to 30th November, 2020 and Tax audit from 30th September, 2020 to 31st October, 2020. All pending refunds to a charitable trust and non-corporate business and professionals including proprietorship, LLP and co-operative shall be issued immediately.
- FM Nirmala Sitharaman said that “Reduce TDS and TCS rate by 25%, will apply to all payments, to last till March 31, 2021. Will release ₹ 50,000 crore in the hands of people.”
- FM Sitharaman: Period of Vivad se Vishwas Scheme for making payment without additional amount will be extended to 31st December, 2020.