ATMANIRBHAR BHARAT, 20 LAKH CRORE FINANCE PACKAGE

Highlights of Finance Minister’s Announcement on 20 Lakh Crore Finance Stimulus

On 13 May, 2020 the Finance Minister Ms. Nirmala Sitaraman has announced 15 different measures under Aatmanirbhar bharat; 6 of which are pertained to the Micro Small and Medium enterprises

The focus will be on what can be defined as the factors of production- Land, Labour, Liquidity and Law. Intention is also to take local brands to a global level, thus global value chain is also kept in mind. Five pillars of Atmanirbhar Bharat –Economy, Infrastructure, System, Vibrant Demography and Demand.

Pradhan Mantri Garib Kalyan Package (1)

Rs. 1.70 Lakh Crore relief package under Pradhan Mantri Garib Kalyan Yojana for the poor to help them fight the battle against Corona Virus:

•Insurance cover of Rs 50 Lakh per health worker

•80 crore poor people given benefit of  5 kg wheat or rice per person  for next 3 months

•1 kg pulses for each household for free every month for the next 3 months

•20 crore women Jan Dhan account holders get Rs 500 per month for next 3 months

•Gas cylinders, free of cost, provided to 8 crore poor families for the next 3 months

•Increase in MNREGA wage to Rs 202 a day from Rs 182 to benefit 13.62 crore families

•Ex-gratia of Rs 1,000 to 3 crore poor senior citizen, poor widows and poor Divyang

Pradhan Mantri Garib Kalyan Package (2)

Announcements For MSME

·      3 Lakh collateral free loan for MSME and there will be a 4 year tenure on the loans with 100% credit guarantee to banks and NBFCs on principal and interest. The offer will be valid until 31 Oct 2020 and no fresh collateral will be required, no extra fee will be charged. 

·      Rs 20,000 crore liquidity through subordinate debt-based scheme for stressed MSMEs.

·      Funds of Funds- Funds worth 50,000 crore equity infusion for those who are viable and eligible.

·  Change in Definition of MSMEs- 

  The definition is being changed in  the favour of the MSMEs. Investment limit which define MSME is being revised upwards, even with an  increased investment they’ll still be under benifits of MSME. Additional criteria of turnover has been brought up. Manufacturing and service-bases MSMEs to now enjoy same benefits. Now investment can be upto 1 crore and turnover  upto 5 crore for an organisation to be considered under MSME.

·      FM announced that the Global tenders will be disallowed in government procurement upto Rs 200 crores.

·      Within the next 45 days all the recievables of MSMEs will be cleared.

Announcements For EPF Scheme

·      Liquidity Relief is being given for EPF establishment- June July and August EPF contribution will be paid by the government of India. Govt will pay the 12% of both the parties. Relief of Rs 2,500 crores to be provided to benefit 70.22 lakh employees.

·      To provide more take-home salaries- The statutary contribution is being reduced to 10% from 12% so that employers can have money in hand. No change in EPF for Central PSUs. Government to take up PF for firms with 100 staff, earning less than Rs 15,000

Announcements For NBFC

·      The Finance Minister has announced Rs 30,000 crore special liquidity scheme where investment is to be made in primary and secondary investments and debt papers will be fully guaranteed by government of India. Rs 45,000 crore liquidity infusion through a Partial Credit Guarantee Scheme 2.0 for NBFCs

Announcement for DISCOM 

·      Govt. announced emergency liquidity injection of Rs 90,000 crore for cash-desperate discoms. This is one time liquidity infusion.

Announcement for Contractors

·      All Govt of India agencies, such as railways, roadways, will provide 6 month extension to contractors.

Announcement for Tax Payers

·      25% reduction is TDS, and new TDS rate chart will come from tomorrow.

·      Finance Minister has announced that the due date of all IT Return filings extended from July 31 to November 30 2020. Tax audit date extended to 31 Oct 2020.

Thank you for reading my blogs.