The Covid-19 pandemic has wreaked havoc across the world. Global
economic growth has collapsed with several countries expected to witness a
recession in 2020-21. To control the spread of the disease, the Indian
government had to extend the nationwide lockdown for the fourth time, albeit
with certain exemptions.
Both the government and the Reserve Bank of India have announced
several measures to provide relief to borrowers and financial institutions amid
the Covid-19 crisis. The Reserve Bank of India Governor Shaktikanta Das, today,
announced a fresh set of measures to provide additional relief to borrowers.
The announcement comes on the heels of an Rs-20-lakh-crore economic package
announced by the finance minister in five tranches.
Moratorium Extension
The Reserve Bank of India allowed the extension of the moratorium
on monthly payments for term loans by three months till August 31. The fresh
announcement extends the moratorium granted in March, which was slated to end
on May 31. It essentially allows a six-month moratorium on loan EMIs from March
1 to August 31.
The extension is expected to provide major relief to borrowers,
especially self-employed individuals, who were facing a liquidity crunch due to
loss of income. Missing monthly payments in the normal course of business would
mean a negative impact on the borrowers’ credit profile. All term loans such as
home loans and car loans granted by commercial banks, co-operative banks,
all-India financial Institutions and Non-Banking Financial Companies, including
Housing Finance Companies and Micro Finance Institutions can qualify for the
moratorium.
The Reserve Bank of India has categorically stated that the
extension will not lead to any changes in the terms and conditions of the loan
agreements. It means if a borrower decides to defer monthly payments during the
moratorium period, it will not be categorised as a default by the lender and
hence will have no impact on the credit score of the borrower. On the other
hand, the central bank has also eased the asset classification norms for
lending institutions and has allowed the exclusion of the deferment period from
the 90-day NPA norms.
The moratorium announced by the central bank is not a waiver and
borrowers will have to pay the interest on the outstanding loan amount. The RBI
has also allowed lenders to convert the accumulated interest on working capital
facilities over the period of moratorium into a funded interest term loan. The
funded interest term loan will have to be paid during the current financial
year. In March, the central bank allowed lending institutions to recalculate
the working capital cycle of all borrowers who had availed working capital by
way of cash credit or overdraft facilities.
The RBI governor has often spoken of taking calibrated measures
to ease the liquidity pain in the economy. With the finance minister already
announcing a slew of fiscal measures, it was time for RBI to step in. Along
with the extension in the moratorium, the central bank today announced a
40-basis-point cut in the repo rate to 4% from 4.4%. The monetary policy
committee held an out-of-cycle review meeting to decide on the reduction in the
policy rate. In line with the reduction in repo rate, the reverse repo rate has
been cut to 3.35% from 3.75%. The reduction in the repo rate is expected to
spur financial institutions to lend more and increase liquidity in the market.
It will also help banks lower interest rates on term loans like home loans,
which will help in attracting undecided customers into the market.
Other Announcements
With the spread of the infectious disease refusing to slow down,
RBI expects growth to be negative in the current fiscal. The central bank
expects growth to pick up gradually in the second half of the fiscal year with
the trajectory depending on the progress of the pandemic.
The RBI expects headline inflation to fall below its medium-term
target of 4% in the third or fourth quarter of the fiscal year.
The central bank announced a line of credit worth Rs 15,000 crore
to EXIM Bank for 90 days with a rollover of up to one year.
The RBI has provided a special refinance facility worth Rs 15,000
crore to SIDBI for 90 days for lending and refinance operations in one of its
earlier announcements. The central bank announced a further rollover of 90 days
for the refinance facility at the end of the initial 90-day period.
The rules for withdrawal from the Consolidated Sinking Fund has been eased by RBI, resulting in the release of an additional Rs 13,300 crore for the states.
LG Q61 with military-level durability & 48MP quad rear cameras announced
Founded in 1958, LG Electronics has
come a long way. Today, the brand has become a household name and with its
range of new-age smartphones, it is even beginning to capture a good share of
the mobile market. The latest device launched by the South Korean multinational
electronics company is LG Q61. The smartphone comes at a time when the market
is being bombarded by budget phones from Chinese brands. But owing to the sharp
Korean technology, it will be sure a worthwhile purchase.
Here is all information about the new
LG Q61:
Display and processor
The new LG smartphone is considerably
sleek and weighs about 191g with dimensions of 164.5 x 77.5 x 8.4mm. LG Q61
features a solid 6.5 FHD display with an aspect ratio of 19:5:9 and 2340 x 1080
pixels. This is on par with other Chinese smartphones that have been doing the
rounds in the market currently. On the battery front, the latest device by LG is
powered by a 2.3GHz Octa-Core MediaTek Helio P35 processor and 4GB RAM. There
is an internal storage space of 64GB, expandable externally up to 2TB via a
microSD card. Since users prefer large storage, this particular specification
at the mid-budget price will probably give a tough competition to other brands.
On the camera arm, there is a
quad-setup with a primary lens of 48MP, supported by an 8MP ultra-wide camera,
a 5MP depth sensor and another 2MP macro shooter. For those top-notch selfies,
the device packs a smart 16MP selfie camera. To focus on the battery capacity,
there is a standard 4,000mAh built-in power with military-grade durability
compliant with MIL-STD 810G. Even though the battery does not significantly
stand out, it is still massive support.
Other features and price
In terms of connectivity features,
there is a Wi-Fi, 4G VoLTE, Bluetooth 5.0, NFC, GPS, USB Type-C, 3.5mm
headphone slot, and DTS: X 3D Surround. The phone also has a fingerprint sensor
and a Google AI support. The new LG Q61 is dual SIM and runs on Android 10. It
has been offered in titanium and white colours only as of now. With the price
of LG marked at 369,600 won (approximately INR 22,740) for the base model (4GB
RAM and 64GB storage), it is very likely that the device will give the other
brands a run for their money. You can be prepared to buy this popular phone
with consumer durable loans.
Currently, this phone by LG has only
been launched in South Korea, where it is expected to go live for sale starting
May 29. Even though there has been no confirmation about the release of the
smartphone globally or in India, it is highly anticipated that LG Q61 will
enter the Indian markets by the end of summer 2020.
If you want to own this latest offering from the house of LG without draining your savings, you can apply for Tata Capital’s flexible consumer durable loans that are available at interest rates starting from 0%.
Honor X10 with 6.63-inch FHD+90Hz display, Kirin 820 5G & 40MP triple rear cameras announced
If there is
one thing that the lockdown has made evident, it is that a good smartphone is
essential for survival in these times. And given the extension of the lockdown
till May 31, this might be just the perfect time to buy a handy, powerful yet
wisely featured smartphone such as Honor X10.
Know more
about Honor’s X10 here:
Appearance and display
The
smartphone weighs 203 grams with dimensions of 163.7 x 76.5 x 8.8 mm, ensuring
a strong grip. On the display front, the phone marks a solid 6.63-inch
notch-less FHD screen with IPS (2400*1080 pixels). It has a sub-par refresh
rate of 90Hz and a touch sampling rate of 180Hz. The aspect ratio is the
standard 20:9, which is still higher than its predecessor Honor 9X.
The new Honor
smartphone is fuelled by the HiSilicon Kirin 820 5G chipset and supports a
multitude of 5G bands including n41, n78, n38, n1, n77 among others. With such
a massive upgrade in processing technology, the smartphone will delight users
by allowing them a downloading speed of 1003Mbps on 5G. To add further joy, the
Chinese brand has packed this device with Huawei’s Super Uplink 5G technology,
thus promoting high-quality network calling. Also, Honor X10 offers 6GB LPDDR4x
RAM with 6GB storage, 6GB RAM +128GB storage, and the top 8GB RAM + 128GB
internal storage. There is an allowance for external memory expansion up to
256GB.
Battery and camera
Even though
the battery power of 4,300mAh is 8/10, given the outstanding performance of
Honor’s 9X and 9X Pro even with a lower battery scale, it is nearly guaranteed
that the users won’t face any issue. To add more relief, there is 22.5W
fast-charging support. Moving on to the stunning camera quality, you can be
assured of some great pictures for your social media handles. There is a 16MP
pop-up selfie camera, backed by Sony IMX600y a 40MP RYYB (for better low-light
pictures), an 8MP ultra-wide lens, and another 2MP depth sensor. The phone also
has ISP 5.0 image sensor processor and an ISO 153600, allowing users to click those
perfect videos and photos even at night.
Other features and pricing The phone features a fingerprint sensor, Dual SIM, Wi-Fi, Bluetooth, GPS, USB-Type C, and a 3.5 mm audio slot. The basic model with 6GB RAM and 64GB storage is priced at 1,899 Yuan (approximately INR 20,000) and goes up to 2,399 Yuan (approximately INR 25,500) for the topmost range. It will be available in racing blue, light speed silver, burning power orange, and speed black colours from May 26 in China. While no information on the availability of the phone in India has surfaced, it is expected that with the economy now opening for trade, the smartphone will make an entry soon. You can apply for 0% interest consumer durable loans from Tata Capital and ensure that your pocket does not hurt for this purchase.
Steps to apply for collateral-free MSME loans under the COVID-19 Relief package
The Indian
Prime Minister’s address to the nation had kicked off a flurry of activities
from the finance minister and she responded by making five tranches of
announcements to bring the Indian economy back on its rails.
The MSME
sector is among the largest contributors to the Indian GDP at about 30% and
definitely the largest contributor to exports at about 50%. It is also the
second largest employer, next to agriculture, providing employment to about 11
crore Indians.
The sector
hosts a massive number of MSME entities that operate in India. There are over
63 million units spread equally in the rural and urban areas. Owning to the
lockdown the economic activity has come to a standstill and the MSMEs are the
hardest hit. It is little wonder that the finance minister announced some
important measures to revitalize the sector.
One
of the major measures is the collateral-free
automatic loans worth Rs 3 lakh crore guaranteed by the Central Government with
liberal terms benefitting 45 lakh MSMEs.
This measure is aimed at the viable MSMEs and
the terms of the loan are
Eligibility
Viable standard account MSMEs
Turnover of less than Rs 100 crore
Outstanding of less than Rs 25 crore
No additional collateral
Loan fully guaranteed by the central
government
Features
The features of the automatic loan extended to
MSMEs are as follows:
20% of outstanding loan as on 29
February 2020
No additional collateral
Loan fully guaranteed by the central
government; risk weight is zero
12 month moratorium on principal
repayment
4-year tenure
No guarantee fee
Scheme open up to 31 October 2020
Interest
The interest can vary depending on the lender
as follows:
Banks – marginal cost lending rate plus 1 percent
NBFC – up to 14%
Other terms
MSMEs with more than one lender can
avail from any one lender
RBI approval required for government
guarantee
Lender will have second charge of
assets already pledged
Based on the above eligibility conditions and
other terms MSMEs can apply to bank, the Small Industries Development Bank of
India (SIDBI), National Credit Guarantee Trustee Company Ltd (NCGTC) and NBFCs.
These lending institutions have sent proposals to the government for approval
and once the approval is received MSMEs can apply to these agencies and avail
the automatic loan as per eligibility conditions.
The automatic loan scheme is likely to help 45
lakh MSMEs spurring them into revitalizing their business with ready credit
available to them. They have four years to repay the loan and one year
moratorium on principal repayment. Thus, these MSMEs have one year to recoup
their businesses to pre-Covid-19 period without any cash flow on financing the
automatic loan.
On the other side banks and other lending
institutions should be ready to lend as the loans are fully guaranteed by the
central government. Hitherto, though flush with funds, banks were not ready to
lend.
With these and other measures, the government hopes to revive the economy.
Check out the new MSME insolvency codes from COVID-19 Relief Package
The
Insolvency and Bankruptcy Code (IBC) was introduced in May 2016 to hasten debt
resolution as banks were facing monumental non-performing loans. The IBC
applies to individuals, partnerships and companies. The IBC enables resolution
to insolvency within 90 days for individuals and 180 days for others. Both
creditor and debtor can proceed against each other to start ‘recovery.’ The
default threshold was Rs 1 lakh.
As
per data available, up to December 2019, the bankruptcy tribunal has taken up
3,254 companies for resolution under IBC. Out of these, 190 companies have
received approval for resolution plans. About 780 companies are under
liquidation process. About 246 companies are closed after review or appeal.
Importance of MSMEs
MSMEs
are the mainstay of the Indian economy. They account for 30% of India’s GDP and
50% of India’s exports. Second only to the agricultural sector, MSMEs employ 11
crore people, 5crore in rural areas and 6 crore in urban areas. MSMEs
contribute to 45% of manufacturing output. As
per the 2018-19 annual report of the Ministry of Micro, Small and Medium
Industries, out of 63.388 million MSMEs 63.052 million belong to micro
industries, 32.488 million MSMEs (51.25%) are in rural areas and 30.9 million
MSMEs (48.75%) are in the urban areas.
The
COVID-19 pandemic has disrupted normal economic activity and millions of MSMEs are defaulting on their loan repayments. Fearing a
deluge of fresh bankruptcy filings, the government had suspended sections 7, 9
and 10 of the IBC. However, there was a clamor for suspending IBC proceedings itself.
The government has plans for small businesses through a
special resolution framework because the playing field is not level when
compared with larger corporate companies. The intent of the government is to be
more lenient towards MSMEs. At present, under Section 29A, smaller companies have exemption benefit in
which defaulting promoters are prohibited from bidding.
As
a part of the Rs 20-lakh crore COVID-19 stimulus package, the finance minister, in her 5th tranche of
announcements, made the following announcements in regard to IBC that would
help the MSMEs:
Suspension of IBC proceedings for one year
Increase of default threshold from Rs 1 lakh to Rs 1 crore
Special insolvency resolution framework for MSMEs will be
notified under Section 240A of the insolvency code
Debt relating to Covid-19 will be excluded from the
definition of ‘default’ under the code by amending the insolvency law
The policy changes on IBC have simply taken millions of MSMEs
out of IBC proceedings. Thus, the IBC gives breathing time of one year for a
large number of MSMEs. Secondly, halting IBC proceedings for one year will also
relieve MSMEs of stress arising out of creditor defaults in this period.
With no IBC proceedings against them, MSMEs will have one year’s time to recover and set their businesses in order. The various measures announced by the government will also help MSMEs to recover faster. The government is providing help to viable MSMEs and stressed MSMEs with separate schemes to help them recover.
3 Lakh Crore COVID Relief Package for MSMEs: How will this benefit the MSMEs and Start-ups?
The
importance of MSMEs in the Indian economic scenario is humungous. Employing 11
crore Indians (6 crore in urban areas and 5 crore in rural areas), MSMEs
account for 30% of India’s GDP and 50% of India’s exports. The percentage of
micro industries in the MSME sector is about 99.4%. Thus, if the MSME sector as
a whole gets disrupted then it means that it affects a large number of micro
industries.
The
COVID-19 pandemic has really shaken up the very foundations of the MSMEs
resulting in the closure of 43% of industries. The effect is catastrophic and
it can be seen in the state of the Indian economy as various estimates for
FY19-20 pegged GDP between 2 and 4% and for FY20-21 GDP is projected between
1.8 to 2.8%.
Recognizing
the importance of the MSME sector, the Indian Finance Minister (FM) announced
six measures for the sector out of which the most important one is the
allocation of Rs 3 lakh crore for collateral free automatic loans for MSMEs. How
will this measure benefit the MSMEs?
Here’s
a look at the way the measure is going to benefit the MSMEs.
Features of the
automatic loan
The
governments offer to MSMEs comprises the following features:
Collateral-free
loans with cap on interest rate and zero guarantee fee
Tenure of the
loan is for four years with moratorium of 12 months for principal repayment
Scheme is open up
to 31 October 2020
Fully guaranteed
by the Central Government
All MSMEs with
outstanding credit of up to Rs 25 crore and turnover up to Rs 100 crore will be
eligible for automatic loan to the extent of 20% of loan outstanding as on 29
February 2020.
This
measure is expected to revitalize the sector as it will benefit more than 45
lakh MSMEs.
Timely working
capital
The
COVID-19 lockdown has brought the economy to a standstill and the MSMEs
suffered badly with absolutely no cash flow during the past couple of months.
The automatic loan will provide working capital for the MSMEs to pay wages to
their workers, pay bills to essential service providers and buy raw materials
to restart operations once the lockdown is lifted.
This
measure is timely because the liquidity had dried up on account of the
lockdown. Most of the banks had funds to lend but would not do so without
adequate security to back the loans. Most of the MSMEs had already reached
their credit limits and could not find suitable assets to provide collateral.
With this important measure banks are likely to come to the rescue of the MSMEs
and start lending as the loans are guaranteed by the Central Government.
MSMEs to reboot
MSMEs
are expected to utilize the facility to reboot and pick up their business from
where they had left off prior to the lockdown. The government has been
sympathetic to their requirement as it has allowed a moratorium of 12 months
and 4-year tenure to repay the loan. MSMEs should be able to take advantage of
the automatic loan scheme and get back on their tracks quickly.
In
respect of startups, there is no specific measure to help the startup
separately. However, those startups who have registered as an MSME would be
eligible for this automatic loan scheme. In fact, more startups are likely to
register under the MSME umbrella and avail benefits. It is possible that the
there will be significant addition to the startup family comprising 50,000
entities.
Besides
the automatic loan scheme the government has announced five other measures
specifically aimed at the MSME sector which include infusing equity for units
that are doing well as well as stressed units, change in the definition of
MSMEs, removal of distinction between manufacturing and services, disallowance
of global tenders up to Rs 200 crore contract value and clearing payments of
government contracts within 45 days.
All these measures are expected to revitalize the MSME sector and help recover India’s economy.
Highlights from all 5 tranches of COVID Relief package by the Finance Minister of India
In his
address to the nation, the Indian Prime Minister announced a stimulus package
of Rs 20 lakh crore aimed at all sections of society and the economy. The Union
Finance Minister (FM) announced the details of the package in five daily press
briefings beginning 13 May 2020 and ending 17 May 2020.
The
highlights of the measures announced are as follows:
1. First press
briefing on 13 May 2020
The first press briefing addressed the
concerns of sectors that included MSMEs, EPF, DISCOMS, Contractors, Real Estate
and Taxation.
MSMEs
MSMEs were singled out for special attention
with six measures that included
Collateral-free automatic loans worth
Rs 3 lakh crore guaranteed by the Central Government with liberal terms
benefitting 45 lakh MSMEs
Rs 20,000 crore liquidity measure
fully guaranteed by Central Government benefitting 2 lakh MSMEs
Rs 10,000 crore corpus for setting up
Fund of Funds to generate Rs 50,000 crore equity for viable MSMEs
Change in definition of MSMEs and
removal of distinction between manufacturing and services
No global tenders for government
contracts up to Rs 200 crore value
Government to pay receivables to MSMEs
for government contracts within 45 days
Employees drawing less than Rs 15,000
per month will get extension of liquidity relief Of Rs 2,500 crore for another
3 months up to August 2020 benefitting 3.6 lakh entities
Employer’s contribution reduced to 10%
from 12% for 3 months providing Rs 6,750 crore of liquidity to 72.2 lakh
entities
NBFCs
NBFCs, Housing Finance Institutions and MFIs
merited two measures:
Rs 30,000 crore liquidity infusion for
buying investment quality debt papers fully guaranteed by the Central Government
Rs 45,000 crore liquidity infusion –
Partial Credit Guarantee Scheme 2.0 – by purchasing commercial paper and bonds
in which Central Government will bear first 20% loss
DISCOMS
Rs 90,000 crore liquidity against
receivables of DISCOMS under State Government guarantee
Contractors
Extension of contracts of Railways,
Highways, Road Transport and CPWD by six months
Release of partial bank guarantees
matching completed work
Real Estate
Treating COVID-19 period as an act of
God
Extending registration date by 6
months for projects expiring on 25 March 2020
Taxation
25%
cut in TDS and TCS rate
for non-salaried payments up to 31 March 2021 adding Rs 50,000 crore liquidity
Charitable institutions will receive
immediate refunds
Extension of Vivad se Vishwas scheme until
31 December 2020
Extension of filing of ITRs until 30
November 2020
2. Second press briefing
on 14 May 2020
The second press briefing addressed the concerns
of sectors that included migrant workers,
small farmers, street vendors
and middle-income group.
Migrant workers
Migrant
workers faced hardships due to income drying up on account of halting of the
economy. The measures announced for them included
Free 5 kg of rice or wheat and 1 kg
of chana per month for the next two months benefitting 8 crore migrant workers
at a cost of Rs 3,500 crore incurred by Central Government
One Nation One Ration Card (ONORC)
through national portability
Migrant worker returnees to get work under
MGNREGS
Creation of Affordable Rental Housing
Complexes (ARHC) in which migrant workers can rent accommodation under PM Awas
Yojana
Interest
subvention of 2% for next 12 months under the MUDRA Shishu Loan scheme for
those who have availed loans up to Rs 50,000 benefitting 3 crore people
Street Vendors
Rs
10,000 working capital loan facility to help them start work after lockdown
benefitting 50 lakh street vendors
Middle Income
Group – Affordable Housing
Middle-income
group households will get extension of Credit-linked subsidy scheme (CLSS) up
to March 2021 benefitting 5.8 lakh MIG households spurring investments of Rs
70,000 crore
Tribal Welfare
Rs
6,000 crore will be spent on creating jobs for tribal and adivasis under CAMPA
(Compensatory Afforestation and Management Planning Authority)
Small and
marginal farmers
Rs
30,000 crore for emergency working capital funding to farmers beyond the
existing Rs 90,000 crore normal refinance route benefitting 3 crore farmers
Kisan Credit Card
2.5 crore more farmers including fishermen and
animal husbandry farmers to get Kisan Credit Card scheme through which Rs 2
lakh credit flow will be generated
3. Third press briefing
on 15 May 2020
The third press briefing addressed the
concerns of disruptions in supply chain infrastructure in sectors such as agriculture,
food processing, fisheries, animal
husbandry, horticulture, herbal cultivation and beekeeping.
Agriculture Infrastructure Fund
Rs 1 lakh crore Agriculture
Infrastructure Fund to fund infrastructure projects at aggregation points and
farm-gate
Operation Green to encompass all
fruits and vegetable products
Thrust to bee-keeping activities
Opening of borders for inter-state
trade
Micro Food Enterprises
Rs 10,000 crore allotted for
formalizing Micro Food Enterprises in line with “Vocal for Local with
Global Outreach” intent benefitting 2 lakh enterprises
PM Matsya Sampada Yojana (Fisheries)
Rs 20,000 crore earmarked for marine,
aquaculture and inland fisheries activities including cold chains and fishing
harbours generating 55 lakh employment opportunities
Herbal Cultivation
Rs 4,000 crore for herbal cultivation
spread over 1 million hectare of land
Animal Husbandry
Rs 15,000 crore Animal Husbandry
Infrastructure Development Fund to incentivize private sector participation in
dairies
Rs 13,343 crore outlay for National
Animal Disease Control Programme to vaccinate 53 crore animals in the country
4. Fourth press briefing
on 16 May 2020
The fourth press briefing announced policy
initiatives aimed at eight sectors—coal, minerals, defence production, civil
aviation, power distribution, social infrastructure, space and atomic energy.
Coal
Removing government monopoly, commercial mining will
be opened on the basis of revenue-sharing mechanism
Rs 50,000 crore set aside for evacuation
infrastructure
Mining sector
Structural reforms in mining of
minerals through seamless composite exploration-cum-mining-cum-production
regime
500 mining blocks to be auctioned
Joint auction of bauxite and coal
mineral blocks to help reduce cost of electricity generation
Removal of distinction between
captive and non-captive mines to help improve efficiency in mining and
production
Defence production
FDI limit in defence manufacturing increased
to 74% from 49% under automatic route
Project Management Unit (PMU) to be
set up to help contract management and determine requirements of
weapons/platforms and overhaul trial and testing procedures
List of weapons/platforms banned for
imports to be drawn up and list will be enlarged in the future
Reducing the defence import bill is a
major objective
Civil aviation
Optimal utilization of Indian air
space is planned to help reduce operational costs of airlines
Rs 13,000 crore earmarked for
improving facilities to world standards in 12 airports
Rs 2,300 crore earmarked for building
six more airports under PPP model
Power distribution sector
Privatizing power distribution
companies in the union territories (UT)
Reforms in tariff policy covering
consumer rights, promotion of industry and sustainability of the sector
Social-infrastructure
Rs 8,100 crore provision is made
through viability gap funding (VGF) to meet immediate needs of social
infrastructure projects
VGF is increased to 30% from the
present 20%
Space sector
Increased participation of private
sector in space projects including satellites, launches and space-based
services with the active participation of ISRO
Creating geo-spatial data policy for
providing remote-sensing data to tech-entrepreneurs
Atomic energy
Establishment of a research reactor
under PPP model to produce medical isotopes to discover affordable treatment
diseases including cancer
Establishment of facilities under PPP
model to help food preservation through irradiation technology
Linking startup ecosystem with nuclear
sector to synergize research facilities with tech-entrepreneurs
5. Fifth press briefing
on 17 May 2020
The fifth press briefing announced steps
covering various aspects such as MNREGA,
health and education, COVID-19, Companies Act, Ease of Doing Business and Public Sector Enterprises.
MNREGA
Rs 40,000 crore added to the budgeted Rs 61,000 crore
MNREGA scheme to generate 300 crore more person-days to help returning migrants
Health
Public expenditure on health will be increased
Health and wellness centres in rural and urban areas
at grass root level will be expanded
Infectious disease block in hospitals to be set up in
each district
Public health labs to be set up in each block
Education
Technology-driven education through DIKSHA – use of
TV, radio, community radio and podcasts
One dedicated TV channel for each class from first to
twelfth
PM e-VIDYA programme to be launched for multi-mode
access to digital and online education
Special e-content for the visually and
hearing-impaired students
Top 100 universities to start online courses by May 30
Manodarpan, a program to provide psycho-social support
to students, teachers and families for mental health and emotional well-being to
be launched immediately
Defaults under COVID-19
Debts related to COVID-19 to be excluded from defaults
under IBC
No fresh insolvency proceedings for one year
Special insolvency framework for MSMEs to be notified
under section 240-A of the IBC
Minimum threshold to initiate insolvency proceedings
is raised to Rs 1 crore from the existing Rs 1 lakh, which will exclude a
majority of MSMEs from action under IBC
Companies Act
Majority of compoundable offences sections under
Companies Act being shifted to internal adjudicating mechanisms relieving
courts and NCLT
Ease of doing business
Public companies can list securities directly in
foreign jurisdictions
Private companies listing non-convertible debentures
(NCDs) on the stock exchanges will not be considered as listed companies
Public Sector Enterprise
PSE policy to be tweaked to allow private sector to
enter all sectors
Strategic sectors will have at least one PSE and
private sector can also participate
PSEs in non-strategic sectors will be privatized while
retaining one to four PSEs n the sector
PSE structure will be rationalized under holding
companies
State Governments
Rs 4.28 lakh crore additional borrowing by states as
they are allowed to borrow up to 5 per cent of GSDP from the earlier 3 per cent
subject to states undertaking reforms
The measures announced by the FM including the measures taken by the government prior to 12 May 2020 amount to Rs 21 lakh crore, perhaps the most comprehensive measures taken by any government in the history of independent India.
Key highlights from Finance Minister’s Second Speech on COVID Relief Package
Following
the first press conference on 13 May 2020, the Indian Finance Minister (FM)
made the second tranche of announcements at a press conference on 14 May 2020.
The announcements covered measures aimed at migrant workers, small farmers and
street vendors besides covering affordable housing.
The FM
recounted the various measures initiated by governments during the COVID
lockdown to various sections of society. In the backdrop of the earlier
measures the FM made further announcements of the measures for the intended
segments of the society.
The key
highlights of the measures are as follows:
1. Migrant workers
The FM
commiserated with the plight of migrant workers and announced the following
measures to mitigate their hardships:
Free food grains for two months
The central government will make
available through state governments 5 kg of rice or wheat and 1 kg of chana per
month for the next two months free of cost to about 8 crore migrant workers
This measure is applicable to all
migrant workers including those who do not have NFSA or state documentation
The state governments will draw up
the list and distribute the provisions
The central government will spend Rs
3,500 crore on this measure
One Nation One Ration Card (ONORC)
National portability of ration cards
under the ONORC System will enable migrant workers to avail benefits under the
PDS wherever they may be located in any part of India
By August 2020, ONORC would cover 23
states accounting for 83% of PDS population covering 67 crore people
100% national portability would be
achieved by March 2021
Additional Read – “ What is the One Nation One Ration Card
System?”
MGNREGS Work
Migrant workers who have returned to
their home states will be provided work under MGNREGS
As of 13 May 2020,
about 2.33 crore wage seekers in 1.87 lakh gram panchayats have been offered
work
Rental Accommodation
Rental accommodation for migrant
workers is being enhanced by offering incentives to private manufacturing and
industrial units, associations and organizations to create Affordable Rental
Housing Complexes (ARHC) on their private land
Converting government funded housing
into ARHC through concessionaires on PPP mode
Offering incentive to central and
state government agencies to build and operate ARHC
The migrant workers can make use of
the ARHC to rent accommodation for themselves
This scheme will be implemented under
PM Awas Yojana
2. MUDRA
Shishu loan
Under the
MUDRA Shishu Loan scheme, people who have availed loans up to Rs 50,000 will be
eligible for interest subvention of 2% for next 12 months. This will kick in
after RBI moratorium period ends
This
measure will benefit 3 crore people and the central government will bear the
cost of Rs 1,500 towards this measure
3. Street Vendors
Street
vendors will be provided up to Rs 10,000 working capital loan facility to
commence work once the lockdown is lifted
The
central government is making a provision of Rs 5,000 crore for this measure
Street
vendors will be eligible for monetary rewards for making digital payments and
can avail more benefits for prompt repayment action
This
measure will benefit 50 lakh street vendors
4. Middle Income
Group – Affordable Housing
The
Credit-linked subsidy scheme (CLSS) for middle income households with an income
between Rs 6 and 18 lakh, started in May 2017 and ending March 2020, will be
extended up to March 2021. The extension will spur investments of Rs 70,000
crore in housing having a cascading effect on sectors such as steel, cement,
construction materials and transportation besides creating numerous jobs
So
far 3.3 lakh MIG households have taken benefit under this scheme, and the
extension would benefit an additional 2.5 lakh MIG households
5. Tribal Welfare
Tribal
citizens and adivasis will benefit from CAMPA (Compensatory Afforestation and
Management Planning Authority) funds of Rs 6,000 crore earmarked for creating
jobs for this group
State
governments can use the funds for works related to artificial and natural
regeneration, forest management, soil and moisture conservation, forest
protection, development of forest and wildlife infrastructure, wildlife
protection and management
Rural,
semi-urban and urban areas will be covered under the measure
6. Small and
marginal farmers
Farmers
will get additional emergency working capital funding through NABARD to the
tune of Rs 30,000 crore through RRBs and Rural Cooperative Banks. This is over
and above Rs 90,000 crore existing normal refinance route
This
measure will benefit 3 crore farmers who can utilize the funds for post harvest
Rabi crop and ensuing Kharif sowing season
Kisan
Credit Card
The Kisan Credit Card scheme will be extended
to an additional 2.5 crore farmers, including fishermen and animal husbandry
farmers
The scheme offers credit at concessional rate
of interest
The credit flow will be Rs 2 lakh crore
As can be seen from the measures announced the government is addressing the needs of different sections of society and economy firstly to mitigate their hardships and secondly to allow them to continue their livelihood in the post COVID period.
All you Need to Know About One Nation One Ration Card Scheme
One Nation One Ration Card System
The Indian Finance
Minister, in her second press conference on 14 May 2020, announced measures to
support various sections of the society. Among the measures she announced for
migrant workers, national portability of ration cards was one of the important
ones. She said that national portability would be attained through One Nation
One Ration Card (ONORC) System whereby migrant workers can use their existing
ration cards issued in their home state to avail food grains at concessional
rates at a Fair Price Shop (FPS) in any other state (not being their home
state) throughout India through the Public Distribution System (PDS).
She said
that the ONORC System was on stream. Giving an update on the ONORC, she said
that 67 crore people in 23 states and Union Territories out of 81 crore PDS
population would be under the ONORC System by August 2020 and the entire PDS population
would be onboard by March 2021.
What is this
ONORC System? Here’s a look at the ONORC System.
Public Distribution System
India’s
Public Distribution System (PDS) is a massive operation that supplies food
grains at concessional rate to over 81 crore people belonging to 23 crore
households throughout India. The system operates under the National Food
Security Act, 2013. The designated Fair Price Shops (FPS) supply the entitled
quota to beneficiaries who are listed in family ration cards. The system limits
the ration card holder to buy supplies only from the designated FPS which tags
the ration card of the head of the household.
Though the
PDS is meant for poorer sections of society, the implementation of PDS was
inefficient and it acquired notoriety for a variety of reasons necessitating a
review and reform of the system. There was a need to provide portability to
ration card holders as a large section of ration card holders were migrant
workers and they would go wherever their work took them. This created problems
for them to avail food grains at FPS in places (not their home state) where
they were working.
ONORC System
Accordingly,
an Integrated Management of Public Distribution System (IM-PDS) from April 2018
was launched to attain nation-wide portability of ration card holders through
One Nation One Ration Card (ONORC) system. In this system, migrant workers
could use their existing ration cards at any FPS anywhere in India.
In order to
operate the IM-PDS smoothly certain prerequisites were necessary for both FPS
and the beneficiary.
The FPS needed to install an
Electronic Point of Sale (ePoS) terminal which could authenticate the biometric
identity of the beneficiary
The ePoS terminal should be capable
of tracking the utilization of quota entitlement of the any ration card issued
anywhere in the country
The biometric identity of the
beneficiary had to be captured electronically which was possible through the
Aadhaar number
Thus, the
beneficiaries were identified by their Aadhaar numbers which were seeded to
their respective ration cards. Since the Aadhaar captured bio-metric
information of the beneficiary, the same could be used at the FPS to
authenticate the identity of the beneficiary through the ePOS installed there. Once
the identity of the beneficiary had been established the system had to provide
the utilization of quota pertaining to the beneficiary’s ration card back home.
This would be provided by using technology to track a ration card in real time.
Actually, a
system already exists within states where a portal known as Annavitaran hosts
distribution of food grains data through ePoS terminals for beneficiaries to
use their quota not only in their home district but also in any other district
of the state where a FPS has installed ePoS terminal.
Thus,
technology is being employed to now link the whole country through ePoS which
can authenticate beneficiaries’ identity through bio-metric verification of
their Aadhaar. The same ePoS can also provide data on the utilization of quota
of the ration card to which the beneficiary is seeded. Thus, it is possible to
rollout the ONORC System.
Judging by the update given by the FM, it is a matter of time before the remaining states and Union Territories come on board and the full scale national rollout could take place well before March 2021.
What to do if your Business is Operating at a Loss?
Every
business’ financial goal is to generate maximum profits from its operations and
avoid losses and risks. Unfortunately, there is no secret ingredient to add to
the recipe for guaranteed results.
A
solid financial plan effectively contributes to avoiding any losses and
mitigating risk. But what do you do when you’re operating at a loss despite
your best efforts? A good thing to start with is to apply for business loan
that will help get your business through a rough patch unscathed and not allow
the losses to continue in the long-term.
You’re
in overdraft and don’t have a plan to pay it off
You
don’t have adequate money to settle your liabilities
If
any of these situations apply to you, here are a few solutions for you:
1. Carefully evaluate your cash flow
The
common phrase “cash is king” is true. If there’s one thing more pivotal to a
growing business than profit, it’s cash! Typically, cash flow projections are
planned. However, if you’re on shaky ground, revisiting and changing your cash
flow plan can help put an end to the trouble well before it gets unmanageable.
Specifics about inflow and outflow help you take executive decisions like
taking an instant business loan to ease the situation and promote growth.
2. Focus on existing sources of revenue
Direct
your attention toward existing customers. They’re your best prospects for
immediate sales. Selling more to them is one of the best and easiest ways to
boost profitability and revenue. They’re loyal, and they already know and trust
your business. The chances of them reordering from you are higher.
Quick
business loans are perfect for such scenarios when your product sells out,
and you need cash.
3. Modify your prices
Tweaking
your pricing structure and applying pricing strategies is an excellent way to
earn cash. You should intend to sustain the company’s momentum and maximizing
the value you bring to customers. Fine-tune your pricing in a way such that it
doesn’t disrupt your brand image, but help gets additional revenue.
4. Don’t hesitate to get loans
Whether
you’ve just started your business, or you’ve been around for a while, a loan
for business is an excellent way to ease your financial burden. Loans help you
meet essential requirements like dealer and vendor financing, paying rent and
staff payouts, etc. The money allows you to manage things well and steer the
business in the right direction.
When
you take a business loan online, make sure you’re clear about how you will use
the money. It’s crucial you employ the right fund management strategy. If used
well, a loan could be the perfect tool for your business.
Always think ahead
Once
you identify the reason behind the losses you’re making, use any of the above
solutions that are suitable to formulate a recovery plan.
It’s always the best idea to move quickly and get your business back on the right track. Talk to us about the possibility of a business loan if you need some financial assistance.