FINANCIAL ASSISTANCE AND PACKAGES FOR COMMON MAN AND SMALL BUSINESSES: HIGHLIGHTS FROM NIRMALA SITHARAMAN'S ANNOUNCEMENTS. BRIEF REPORT!

Prime Minister Narendra Modi announced a 20-lakh crore relief package to reboot the economy in order to make up to the losses incurred due to COVID19. Finance Minister Nirmala Sitharaman addressed the nation at 04:00 pm on Wednesday to give details about this relief package. 

Before getting into the details, the finance minister listed the achievements of Modi government in the last six years. She cited examples of measures taken for different sectors/ industries such as Kisan Bima Yojna for agriculture, IBC reforms and GST reforms for Businesses. She emphasized on PM’s vision – Self Reliant India Movement. She said that the government will be sharing details about PM’s vision for a self-reliant India for the next few days; starting from today.

Today, she spoke about 15 different measure that are going to be implemented. Six are for MSMEs, two are related to EPF, two are related to HFCs and MFIs, one is for discoms, one for contractors and one for real estate among others. 

Six Reforms related to Micro Small and Medium Enterprises (MSMEs)

- Announced a collateral- free automatic loan for MSMEs worth Rs 3 Lakh crore to be provided. It will be a four-year tenure that provides 100 percent guarantee. It is set to benefit 45 lakh units and last till October 21,2020. 

-In order to provide equity support to stressed MSMEs, the government will facilitate a provision of Rs.20,000 crores as subordinate debt. It will help almost 20 lakh stressed MSME units.

-Viable MSMEs which need support due to the COVID19 outbreak will be given support through funds worth Rs, 50,000 cr. It will be operated through a mother fund and few daughter funds.

-She also highlighted that since there is a change in definition of MSMEs, they need not worry about outgrowing in terms of size or capacity. Government is yet to give more details about the definition of MSMEs and the number of companies that would fall under the new bracket. 

-Global procurement tenders up to Rs 200 crores is going to be disallowed so that the country can support the idea of ‘self- reliant India’. This will help MSMEs to do business without having to compete with cheaper global products. 

-E- market linkages will be provided to MSMEs to ensure that they can market themselves in the absence of trade fairs and exhibitions post COVID19. 

Unfair competetion from foreign companies to become a thing of the past; Global tenders to be disallowed in Government procurement upto Rs 200 crores#AatmaNirbharBharatAbhiyan #atmanirbharbharat pic.twitter.com/voj3hstdOR

— PIB India #StayHome #StaySafe (@PIB_India) May 13, 2020

Reforms related to EPF 

-Liquidity relief has been announced for all establishments and employees. To ease financial stress, government will be providing liquidity relief of 2,500 crore, Finance Minister said. 

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 a liquidity support of Rs 6750 crores. #AatmaNirbharBharatAbhiyan pic.twitter.com/VSysfvk4KU

— PIB India #StayHome #StaySafe (@PIB_India) May 13, 2020

-In order to increase the take-home salary, government has reduced the EPF contribution of employers and employee from 12 percent to 10 percent. The change will remain in place for three months. An amount of Rd 6750 crores has been provided as liquidity support. 

To ease financial stress as businesses get back to work, Government decides to continue EPF Support for Business & Workers for 3 more months providing a liquidity relief of Rs 2,500 crore. #AatmaNirbharBharatAbhiyan pic.twitter.com/02uw5GO1TE

— PIB India #StayHome #StaySafe (@PIB_India) May 13, 2020

Reforms related to Non- Bank Financial Companies/ HFCs/ MFIs

-The government has launched a special liquidity scheme for NBFCs/ HFCs/ Micro Finance Institutions (MFIs) worth Rs 30,000 crores.

Government launches a Rs 30,000 crore Special Liquidity Scheme for NBFCs/HFCs/MFIs pic.twitter.com/vPfYGP7E7I

— PIB India #StayHome #StaySafe (@PIB_India) May 13, 2020

Reform for Non-Bank Financial Companies (NBFCs)

-The government has announced Rs 45,000 crore liquidity infusion. It will be done through a Credit Guarantee Scheme for NBFCs. The first 20% loss will be borne by the govt. Of India.

Government announces Rs 45,000 crore liquidity infusion through a Partial Credit Guarantee Scheme 2.0 for NBFCs. #AatmaNirbharBharatAbhiyan pic.twitter.com/ORLOV3bIAi

— PIB India #StayHome #StaySafe (@PIB_India) May 13, 2020

Reform for DISCOMS (Power Distribution Companies) 

-The government has announced a liquidity injection of Rs. 90.000 crores. This is a one- time provision which is meant for the infusion of money. 

To give a fillip to DISCOMs with plummeting revenue and facing an unprecedented cash flow problem, Government announces Rs. 90,000 Crore Liquidity Injection for DISCOMs. #AatmaNirbharBharatAbhiyan pic.twitter.com/EVqz8nsm4p

— PIB India #StayHome #StaySafe (@PIB_India) May 13, 2020

Reforms for Contractors

-Government agencies will give up to six months extensions to construction and goods & services contractors. 

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. #AatmaNirbharBharatAbhiyan pic.twitter.com/bR2CShuddl

— PIB India #StayHome #StaySafe (@PIB_India) May 13, 2020

Reforms for Real Estate

-Urban Development ministries will issue advisory to states and Union Territories so that the delivery date of construction activities could be extended in view of COVID19. “These provisions will help real estate industry to reduce the distress and deliver projects in future,” she said. 

Reforms related to TDS and TCS rates

-The government has planned to infuse Rs 50,000 crores liquidity by reducing 25% from the existing rates for TDS, for non- salaried specified payments made to residents and rates of Tax Collection at Source for specified receipts. 

Government to infuse Rs 50,000 crores liquidity by reducing rates of TDS, for non-salaried specified payments made to residents, and rates of Tax Collection at Source for specified receipts, by 25% of the existing rates. #AatmaNirbharBharatAbhiyan pic.twitter.com/LR1jhG9ovY

— PIB India #StayHome #StaySafe (@PIB_India) May 13, 2020

Reforms related to Income Tax

-The due date of all income- tax return for FY 2019-20 will be extended from 31st July & 31st October 2020 to 20th November 2020. For tax audit it has been extended from 30th September 2020 to 31st October 2020.

Among other measures, Due date of all income-tax return for FY 2019-20 will be extended from 31st July, 2020 & 31st October, 2020 to 30th November, 2020 and Tax audit from 30th September, 2020 to 31st October,2020. #AatmaNirbharBharatAbhiyan pic.twitter.com/R4ZWRgss9x

— PIB India #StayHome #StaySafe (@PIB_India) May 13, 2020