Nirmala Sitharaman announces about the economic finance package of Rs 20 lakh crore

Yashshvi

Finance Minister Nirmala Sitharaman addressed the nation today at around 4 P.M. and announces the financial-economic package of Rs 20 lakh crore. Nirmala Sitharaman shared the first installment of this mega package released by the Prime Minister of India. This package was released by the Prime Minister of India because this will help India in making itself self-reliant. Therefore, the main attention of this package is to make local brands global. Let’s have a look and learn about this package in deep.

Six major steps for the revival of the MSME sector-

  1. There will be a collateral-free loan up to 3 lakhs for the MSME. Therefore, this is going to help 45 lakh units so that they can resume work from their homes and save their jobs.
  2. For the stressed MSME’s, Subordinate debt provision of Rs. 20,000 crore has been released and this is going to serve 2 lakhs MSME. Ergo, this will help those who are NPA’s or MSME.
  3. Rs 50,000 crore equity infusion through Mother fund-Daughter fund for MSMEs that are viable but need handholding. Hence, a fund of the fund with a corpus of Rs. 10,000 crore will be set to help all those units that expand capacity and help them list on markets if they chose.
  4. The definition of MSME’s has been expanded and revised, this is just to allow the expansion and not lose benefits. Moreover, there will be no distinction between the manufacturing and services sector MSME.

New definition- Micro units with investment till Rs 1 cr, turnover up to Rs 5 crore. Small units with investment till Rs 10 cr, turnover up to Rs 50 cr. Medium units with investment till Rs 20 cr, turnover up to Rs 100 crore.

  1. The global tenders will be disallowed up to 200 crores for the government contracts.
  2. They will ensure that the linkages are provided all across the board in the absence of non-participation in trade fairs due to this pandemic outbreak of COVID-19. Furthermore, the PSU will clear all the receivable in the next 45 days

For employees-

  1. Liquidity relief of Rs. 2500 crore and EPF support are being given to all the EPF establishments. EPF contribution will be paid by the government for the next 3 months till the month of August. Therefore, this is going to help more than 72 lakh employees.
  2. Statutory EPF contribution for all the organizations and their employees covered by EPFO has been reduced to 10% which was 12% earlier. This is a scheme that does not apply to government organizations. This will infuse Rs. 6750 crore liquidity into such organizations.

For NBFC’s/HFC’s/MFI’s-

  1. Rs 30000 crore liquidity scheme for investing in the investment-grade debt paper of NBFC’s, HFC’s, and MFI’s. The NBFC’s are those that are also funding for the MSMEs. Therefore, this will be fully guaranteed by the government of India.
  2. Rs 45000 crore partial credit government scheme 2.0 for NBFC’s. The first 20% loss will be borne by the guarantor that is the government of India.
  3. For Discoms, an onetime emergency liquidity injection for Rs 90,000 crore is against all the receivables. Therefore, this will be guaranteed by the state that you are living in.

Other details-

  1. There is an extension of up to 6 months that will be provided by the central government agencies like railways, road transports, highways, central public work dept, etc.
  2. A reduction of 25% of existing rates of Tax deducted at source and Tax collection at sources from tomorrow onwards till March 31, 2021. Therefore, this will release Rs. 50,000 crore.
  3. Due date of all IT Return filings extended from July 31 to November 30. Vivaad se Vishwas scheme extended till December 31, 2020. Date of assessments getting barred as on Sep 30, 2020, extended to December 31, 2020. Date of assessments getting barred as on March 31, 2021, extended to September 30, 2021.

Therefore, this is the full economic finance package shared by the Indian Finance Minister that is Nirmala Sitharaman. Stay connected to have regular updates about COVID-19.

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