Finance Minister breaks-up Rs 20L Cr Coronavirus relief-package under Aatma Nirbhar Bharat scheme
Finance Minister Nirmala Sitharaman echoed Prime Minister Narendra Modi’s words of working towards an Aatma Nirbhar Bharat (self-reliant India) while providing a breakup of Rs 20 lakh crore Coronavirus relief-package on Wednesday. She said that the government had a special responsibility towards the poor, the needy, the migrants, and the physically challenged.
The relief-package was announced by the Prime Minister Narendra Modi while addressing the nation on Tuesday night and the package is nearly 10% of the country’s GDP.
The FM said that the PM laid out a comprehensive mission after deep consultation with several sections of the society. The scheme rests on five important pillars - economy, infrastructure, technology, demography, and the chain of demand and supply and have been constituted keeping in mind the needs of land, labour, liquidity, and law aspects.
She said the manufacturing of PPEs, masks, and medicines has grown drastically in these 40 days of lockdown. She said the idea is not to make India an isolationist country, but to build a confident India capable of contributing to the world's growth and added that the total idea behind the Aatma Nirbhar Bharat was to emphasis on promoting local brands or products.
The FM listed some of the past reforms initiated by the Modi government including the PM Awaaz Yojna, Ujjwala, Microfinance schemes, Ayushman Bharat, and added that the lockdown 4.0 would see the ease of doing business and compliance and global value chain integration.
Splitting up of 15 different measures undertaken by the relief-package has been split as - six for Ministry of Micro, Small & Medium Enterprises (MSMEs), two for Employee Provident Funds (EPF), two for Non-Banking Finance Corporations (NBFC), two for Micro Finance Institutions (MFI), one to discoms, one to real estate, 3 tax-related and one contractors.
Collateral free loan of up to Rs 3 lakh crore has been extended for businesses including MSME for firms with Rs 25 crore outstanding loans or an annual turnover of Rs 100 crore would be valid until October 31. The other facilities for these businesses include loans for a tenure of 4 years, a moratorium of 10 months, 100% credit guarantee to banks and NBFC on principal and interest. Also, no fresh collateral or extra fee would be charged.
For the stressed MSMEs, the FM announced equity support of subordinate debt worth Rs 20,000 crore and the Centre would also provide Rs 4,000 crore to Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE). Collateral-free loans would be extended to Small and Medium-sized Enterprises (SMEs) with 12-month moratorium and 45 lakh units would benefit from it. about 2 lakh stressed MSMEs would benefit from the Rs 20,000 crore subordinated debt.
Rs 50,000 crore infusion has been announced for MSMEs through Fund of Funds and will be operated through Mother Fund and few daughter funds to help them expand in size and capacity. Also the definition of MSMEs is changing and the investment limit that defined MSME will go upwards from now on. The MSMEs – manufacturing and service-based will be defined similarly. Even MSMEs with Rs 1 crore investments would be categorised as micro-unit and they can have a turnover of up to Rs 5 crore.
The government has extended liquidity relief of Rs 2,500 crore to all EPF establishments for another three months. Under the PM Garib Kalyan Yojna, 12% of the employer and 12% of employee contribution has been extended for another three months. The government will pay for EPF for another 3 months and about 72 lakh employers will benefit from it. The statutory PF contribution has been reduced from 12% to 10%.
For the cash-starved discoms, the FM announced Rs 90,000 crore liquidity ‘injection’. The loans will be extended on the state government’s guarantee. The liquidity will be infused by the Power Finance Corporation (PFC) and the Rural Electrification Corporation (REC). Also, the Central Public Sector Generation companies will give concession to the discoms which will eventually be passed on to the consumers.
For the contractors and real estate industrialists the government has invoked a Covid-19 Force majeure Clause under the Real Estate Registration Act. Under it, the contractors can extend their registration and completion date by six months for all projects that were expiring on or after March 25.
The Tax collected at source (TCS) Tax Deduction at Source (TDS) rates for non-salaried payments residents will be reduced by 25% of the existing rate from May 14, 2020 to March 31, 2021. The reduction is applicable to all payments and will give a relief of Rs 50,000 crore to the masses. Also, the due date for filing Income Tax Returns (ITR) has been extended from July 31 to November 30.