In her opening remarks, the Finance Minister mentioned that Prime Minister Narendra Modi had laid out a complete imaginative and prescient in his deal with to the nation yesterday. She mentioned that after spending appreciable time, the Prime Minister has himself ensured that inputs obtained from widespread session kind part of an financial package deal within the battle in opposition to COVID-19.
“Essentially, the aim is to construct a self-reliant India that’s the reason the Economic Package is named Aatma Nirbhar Bharat Abhiyaan. Citing the pillars on which we search to construct Aatma Nirbhar Bharat Abhiyaan, FM Sitharaman mentioned that our focus can be on land, labour, liquidity and regulation.”
“Soon after Budget 2020 came COVID-19 and within hours of the announcement of lockdown 1.0, Pradhan Mantri Garib Kalyan Yojna (PMGKY) was announced,” she mentioned, including “we are going to build on this package.”
The Finance Minister unveiled the Prime Minister’s imaginative and prescient for Aatma Nirbhar Bharat:
1. Rs Three lakh crore Emergency Working Capital Facility for Businesses, together with MSMEs
To present reduction to the enterprise, extra working capital finance of 20% of the excellent credit score as on 29 February 2020, within the type of a Term Loan at a concessional fee of curiosity will probably be supplied. This will probably be accessible to models with up to Rs 25 crore excellent and turnover of up to Rs 100 crore whose accounts are customary. The models won’t have to present any assure or collateral of their very own. The quantity will probably be 100% assured by the Government of India offering whole liquidity of Rs. 3.Zero lakh crores to greater than 45 lakh MSMEs.
2. Rs 20,000 crore Subordinate Debt for Stressed MSMEs
Provision made for Rs 20,000 cr subordinate debt for two lakh MSMEs that are NPA or are burdened. The authorities will assist them with Rs 4,000 crore to Credit Guarantee Trust for Micro and Small Enterprises (CGTMSE). Banks are anticipated to present the subordinate-debt to promoters of such MSMEs equal to 15% of his present stake within the unit topic to a most of Rs 75 lakhs.
3. Rs 50,000 crores fairness infusion via MSME Fund of Funds
The authorities will arrange a Fund of Funds with a corpus of Rs 10,000 crore that may present fairness funding assist for MSMEs. The Fund of Funds shall be operated via a Mother and a couple of Daughter funds. It is predicted that with leverage of 1:Four on the degree of daughter funds, the Fund of Funds will probably be ready to mobilise fairness of about Rs 50,000 crores.
4. New definition of MSME
Definition of MSME will probably be revised by elevating the Investment restrict. An extra criterion of turnover additionally being launched. The distinction between manufacturing and service sector may also be eradicated.
5. Other Measures for MSME
e-market linkage for MSMEs will probably be promoted to act as a substitute for commerce gala’s and exhibitions. MSME receivables from Government and CPSEs will probably be launched in 45 days
6. No Global tenders for govt tenders of up to Rs 200 crore
General Financial Rules (GFR) of the Government will probably be amended to disallow world tender enquiries within the procurement of Goods and Services of the worth of lower than Rs 200 crores
7. EPF assist for enterprise and organised staff
The scheme launched as a part of PMGKP beneath which Government of India contributes 12% of wage every on behalf of each employer and worker to EPF will probably be prolonged by one other Three months for wage months of June, July and August 2020. Total advantages accrued is about Rs 2500 crores to 72.22 lakh workers.
8. EPF contribution to be decreased for employers, workers for Three months
Statutory PF contribution of each employer and worker decreased to 10% every from the prevailing 12% every for all institutions lined by EPFO for the following Three months. This will present liquidity of about Rs 2250 Crore per 30 days.
9. Rs 30,000 crores Special Liquidity Scheme for NBFC/HFC/MFIs
The authorities will launch Rs 30,000 crore Special Liquidity Scheme, liquidity is supplied by RBI. The funding will probably be made in major and secondary market transactions in investment-grade debt paper of NBFCs, HFCs and MFIs. This will probably be 100 p.c assured by the Government of India.
10. Rs 45,000 crore Partial credit score assure Scheme 2.0 for Liabilities of NBFCs/MFIs
Existing Partial Credit Guarantee scheme is being revamped and now will probably be prolonged to cowl the borrowings of lower-rated NBFCs, HFCs and different Micro Finance Institutions (MFIs). Government of India will present 20 p.c first loss sovereign assure to Public Sector Banks.
11. Rs 90,000 crore Liquidity Injection for DISCOMs
Power Finance Corporation and Rural Electrification Corporation will infuse liquidity within the DISCOMS to the extent of Rs 90000 crores in two equal instalments. This quantity will probably be utilized by DISCOMS to pay their dues to Transmission and Generation corporations. Further, CPSE GENCOs will give a rebate to DISCOMS on the situation that the identical is handed on to the ultimate customers as a reduction in the direction of their fastened costs.
12. Relief to contractors
All central companies like Railways, Ministry of Road Transport and Highways and CPWD will give an extension of up to 6 months for completion of contractual obligations, together with in respect of EPC and concession agreements
13. Relief to Real Estate initiatives
State governments are being suggested to invoke the Force Majeure clause beneath RERA. The registration and completion date for all registered initiatives will probably be prolonged up to 6 months and could also be additional prolonged by one other Three months primarily based on the State’s scenario. Various statutory compliances beneath RERA may also be prolonged concurrently.
14. Tax reduction to enterprise
The pending earnings tax refunds to charitable trusts and non-corporate companies and professions together with proprietorship, partnership and LLPs and cooperatives shall be issued instantly.
15. Tax-related measures
A- Reduction in Rates of ‘Tax Deduction at Source’ and ‘Tax Collected at Source” – The TDS charges for all non-salaried fee to residents, and tax collected at supply fee will probably be decreased by 25 p.c of the desired charges for the remaining interval of FY 20-21. This will present liquidity to the tune of Rs 50,000 crore.
B- The due date of all Income Tax Returns for Assessment Year 2020-21 will probably be prolonged to November 30, 2020. Similarly, tax audit due date will probably be prolonged to 31 October 2020.
C- The date for making fee with out extra quantity beneath the “Vivad Se Vishwas” scheme will probably be prolonged to December 31, 2020.
Notably, Prime Minister Narendra Modi hailed the bulletins made by the Finance Minister for the Atmanirbhar Bharat Abhiyan financial package deal price Rs 20 lakh crore and mentioned that the measures will go a good distance for companies and MSMEs.
PM Modi tweeted, “Today’s announcements by Finance Minister Nirmala Sitharaman will go a long way in addressing issues faced by businesses, especially MSMEs. The steps announced will boost liquidity, empower the entrepreneurs and strengthen their competitive spirit.”
Today’s bulletins by FM @nsitharaman will go a good distance in addressing points confronted by companies, particularly MSMEs. The steps announced will boost liquidity, empower the entrepreneurs and strengthen their aggressive spirit. #AatmaNirbharBharatAbhiyan
— Narendra Modi (@narendramodi) May 13, 2020
The Finance Minister’s bulletins got here a day after Prime Minister Modi launched large monetary incentives on high of the beforehand announced packages for a mixed stimulus of Rs 20 lakh crore.