New Delhi: The Union Finance Minister Nirmala Sitharaman on Wednesday announced some major economic boosters as part of the first press briefing on Prime Minister Narendra Modi’s Rs 20 lakh crore ‘Atmanirbhar Bharat (self-reliant India)’ package. The grand economic stimulus package has been designed to help the country fight back the economic standstill, in an already slumping economy, caused due to the coronavirus pandemic.Also Read - Centre Likely To Reduce Corporate Tax Rate For Foreign Banks In Budget 2022: Report
Over the next few days, the finance ministry said, a number of schemes and economic relaxations will be announced that will help the country reboot and come out of the fallen economy. Also Read - India's GDP Expands 8.4 Per Cent in July- September Quarter as Covid Restrictions Ease
In her first press briefing, Finance Minister Nirmala Sitharaman announced 15 measures, including six major announcements for MSMEs, two for employees, two for NBFCs and MFIs, and three direct tax measures. Also Read - 8 Cases Of Cryptocurrency-Related Fraud Under Probe By ED: FM Sitharaman In Rajya Sabha
Here are the point-by-point highlights from today’s speech:
1. Finance ministry announced collateral-free automatic loan worth Rs 3 lakh crore for MSMEs (Micro, Small & Medium Enterprises) with turnover up to Rs 100 crore till October 31, 2020.
2. Stressed MSMEs to be provided 20,000 crore via subordinate debt. This will benefit about 2 lakh MSMEs.
3. For MSMEs needing handholding, a ₹50,000 crore fund through the ‘mother fund – daughter fund’ framework being created to expand their capacity and to get listed on markets which they choose.
4. FM revises definition of MSMEs to address their fear of losing benefits due to outgrowing the existing definition.
5. Seamless e-market linkages across the board will be provided to MSMEs, considering their inability to participate in trade fairs due to COVID-19. All pending payments to MSMEs, from central govt. bodies & PSUs to be completed within the next 45 days.
6. Global tenders to be disallowed up to Rs 200 crore in government procurement for tenders. This will address unfair competition being faced by MSMEs, and enable them to participate actively in government purchases.
7. Liquidity relief of Rs 2500 crore EPF support for all EPF establishments announced. EPF contribution to be paid by the central government for another 3 months to benefit over 72 lakh employees.
8. Rs 30,000 crore special liquidity scheme announced for struggling NBFCs/HFCs/MFIs. Investments in both primary and secondary markets, to buy even investment-quality debt papers. This will ease the flow of credit.
9. Rs 45,000 crore partial credit guarantee scheme for NBFCs announced. Under this liquidity infusion, first 20 per cent loss will be borne by the government, even unrated papers will be eligible for investment, enabling NBFCs to reach out even to MSMEs in far-flung areas.
10. Rs 90,000 crore emergency liquidity support to Power Distribution Companies (DISCOMs). This will be against receivables, will enable DISCOMs to pay generation companies, will eventually pass on benefits to customers.
11. A 6-month extension for contractors who suffered in the COVID-19 lockdown without any cost to them, covering all construction and goods/services contracts.
12. Extension of registration & completion date for real estate projects registered under RERA, expiring on or after March 25, 2020, without individual applications. To be treated as ‘Force Majeure’ under RERA, Sitharaman said.
13. TDS and TCS rates reduced by 25 per cent with effect from tomorrow till March 31, 2021. Rs 50,000 crore liquidity through TDS/TCS rate reduction release more funds into the hands of the people – salaried and non-salaried, rather than coming to the government in the form of taxation.
14. All pending refunds to charitable trusts and non-corporate businesses and professions will be issued immediately.
15. Due date of all income tax returns extended from July 31 and October 31 to November 30, 2020. Tax audits being extended to 31 Oct 2020. Date of tax assessments getting barred being extended to Dec 31, 2020. Those getting barred on Mar 31, 2021 being extended to Sep 30, 2021.