The follow-up announcements after the PM’s announcement of Rs 20 lakh crore was flagged off by Finance Minister Smt. Nirmala Sitaraman. She would make announcements on different sectors every day for the next few days.
In today’s press conference (PC) she announced 15 measures covering MSME/EPF/DISCOM/Contractors/Real Estate/Taxation.
The highlights of the PC are as follows:
Smt. Nirmala Sitaraman said that the measures being announced are a continuation of the reforms process started 6 years ago when the new NDA government came into power. The reforms included Direct Benefit Transfer, Micro insurance schemes, PM Awas Yojana, PM Ujjwala Yojana, Swachh Bharat and Ayushman Bharat which were all transformative reforms benefiting the poor in a big way. The other schemes included PM Garib Kalyan Scheme to IBC and GST reforms.
The highlights of the 15 measures announced by Smt. Nirmala Sitaraman include the following:
There are six measures announced for MSMEs as follows:
1. Rs 3 lakh crore for collateral free automatic loan has been allotted for MSMEs which have Rs 25 crore outstanding loan payments or Rs 100 crore Turnover. The loans will be available with 4-year tenure and a moratorium of 12 months. The measure will benefit 45 lakh units. These will be guaranteed 100% by the central government.
2. Rs 20,000 crore liquidity measure for stressed MSMEs. The measure will benefit 2 lakh MSMEs and the measure is fully guaranteed by the central government.
3. Smt. Nirmala Sitaraman announces Rs 50,000 crore equity infusion through ‘Fund of funds’ for MSMEs doing well and wanting to expand their capacities. This handholding will help MSMEs to list their companies in the stock markets.
4. The definition of MSMEs is being modified as follows:
- Micro – Investment up to Rs 1 crore or Turnover up to Rs 5 crore
- Small – Investment up to Rs 10 crore or Turnover up to Rs 50 crore
- Medium – Investment up to Rs 20 crore or Turnover up to Rs 100 crore
There would be no discrimination between service and manufacturing industries.
5. The Finance Mister announced that in respect of tenders for government contracts up to Rs 200 crore, global tenders will be disallowed.
6. The Finance Mister declared that MSMEs with receivables from government contracts will receive payment within 45 days.
Additional Read – Did You Know these Things about the MSME Sector in India?
There are two measures announced for EPF:
1.The scheme announced earlier wherein entities up to 100 workers out of which 90% were drawing less than Rs 15,000 were given liquidity relief for 3 months will be given another 3 months extension up to August 2020. This measure will benefit 3.6 lakh entities and provide 2,500 crore liquidity.
2. The Finance Minister announced relief to employers in payment of PF, EPF contribution by reducing employer’s contribution to 10% from the existing 12% for 3 months enabling a liquidity support of Rs 6750 crore. This scheme will benefit 72.2 lakh entities and government employees will not be eligible.
There are two measures announced for NBFCs, Housing Finance Institutions and MFIs:
1. The Finance Minister announced Rs 30,000 crore liquidity infusion for NBFCs, housing finance companies and MFIs for investment into buying investment quality debt papers fully guaranteed by the central government.
2. The Finance Minister announced a NBFC Partial Credit Guarantee Scheme 2.0 in which liquidity infusion of Rs 45,000 crore through purchase of commercial paper and bonds will be made where first 20% loss will be borne by the central government.
Additional Read – What Should you Know About RBI’s Liquidity Measures for NBFCs?
1. The Finance Minister announced a measure to improve cash flow to the DISCOMs by infusing Rs 90,000 crore liquidity against receivables of the DISCOMS. The state governments will provide the guarantee. This measure will benefit end consumers as rebates will be passed on to them.
1. All contractors working for Railways, Highways, Road Transport and CPWD will get extension of 6 months to comply with contract conditions. The government agencies will release partial bank guarantees to the extent that work has been completed.
1. The Urban Development Ministry is being authorized to issue guidelines to consider COVID-19 period as an act of God and to extend the registration date by 6 months for projects expiring on 25 March 2020.
The Finance Minister announced the following measures under taxation:
1. TDS, TCS rate for non-salaried payments for period up to 31 March 2021 is cut by 25%. The measure will add liquidity to the tune of Rs 50,000 crore.
2. Refunds to charitable institutions will be issued immediately
3. The Vivad se Vishwas scheme will be extended up to 31 December 2020.
4. Due date for filing ITRs are being extended to 30 November 2020 for individuals and 31 October 2020 for assessee under compulsory audit.
The Finance Minister will hold another press conference tomorrow to announce measures for other sectors.