New Delhi: Soon after Union Finance Minister Nirmala Sitharaman announced Rs 3 lakh crore collateral-free loans for small businesses, Prime Minister Narendra Modi on Wednesday said that the steps announced by the FM will boost liquidity, empower the entrepreneurs and strengthen their competitive spirit. Also Read - Coronavirus: Cases in Pakistan Rise Above 69,470; Death Toll Nears 1,500-mark

“Today’s announcements by FM @nsitharaman will go a long way in addressing issues faced by businesses, especially MSMEs. The steps announced will boost liquidity, empower the entrepreneurs and strengthen their competitive spirit,” PM Modi said. Also Read - Bangladesh Reopens Offices, Transport Services Amid Spike in Coronavirus Cases

A day after his announcement of Rs 20 Lakh Crore economic package, FM Sitharaman on Wednesday announced Rs 3 lakh crore of collateral-free loans for small businesses and reduced the tax rate for non-salary payments and provided liquidity to non-banking companies to help them tide over the disruptions caused by the lockdown. Sitharaman said the collateral-free loans will benefit 45 lakh small businesses.

Making the announcement of the first set of components of the Rs 20 lakh crore stimulus package, Sitharaman said Rs 90,000 crore liquidity infusion will be made in electricity distribution companies to help them fight the current financial stress.

She also extended the dates for filing income tax returns and other assessments to November 30. She said the rate of tax deducted at source (TDS) and tax collected at source (TCS) for non-salaried payments up to March 31, 2021, will be cut by 25 per cent. “The move will release Rs 50,000 crore in the system,” she said.

Making further announcements, the Finance Minister also extended by three months the government support to companies with less than 100 employees to meet retirement fund obligations.

For all companies, the statutory obligation to pay 12 per cent of basic salary as employer’s share to employee provident fund (EPF) contribution has been reduced to 10 per cent to boost their liquidity.

She said to boost the construction works, all government agencies will give up to 6-months extension to all contractors to complete construction, and goods and service contracts.