PM Modi’s Rs 20 lakh crore special economic package: Finance Minister Nirmala Sitharaman has announced collateral-free loans for MSME up to Rs 3 lakh crore. For the stressed MSMEs, she further announced Rs 20,000 crore liquidity to benefit around 2 lakh MSMEs. Stressed and NPA MSMEs will be eligible for this facility. FinMin has also decided to infuse capital of Rs 50,000 cr in MSMEs for their expansion. FM Sitharaman has also changed the definition of MSMEs which will allow them to still get the facilities even with higher investment in them. The government procurement, tenders up to Rs 200 crores will not be global tenders. Besides, liquidity of Rs 2,500 crore EPF support for business and workers for 3 more months has been announced due to which over 72 lakh employees are expected to be benefitted. For the NBFCs, FM Sitharaman has announced a special liquidity scheme and Rs 45,000 crore as a partial credit guarantee scheme. The government has also set aside Rs 90,000 for discoms against receivables through state-issued guarantees, to help clear gencos dues to reduce their stress. In today’s announcement, force majeure relief has also been provided to real estate developers and suo moto extension of 6 months have been provided for the projects registered on or before March 25. FM Sitharaman has extended the deadline for income tax return for FY21 by 3 months, while the provision of Vivad se Vishwas scheme has also been extended till December 31, 2020. Prime Minister Narendra Modi, in his quintessential shock-and-awe style, yesterday announced a humongous economic package, which sought to go beyond providing immediate relief against coronavirus fallout, to make India a self-reliant economic powerhouse in the decade to come.
Robust MSME sector is key to improving economic strength and resilience of a country - Mahesh Singhi
Finance Minister Nirmala Sitharaman has laid a clear roadmap for the revival of the micro small and medium enterprises (MSMEs) sector in India which is passing through an unprecedented crisis. MSMEs are the backbone of the Indian economy and generate employment on a large scale for the population of the country. The roll-out of collateral-free loans worth Rs. 3 lakh crore for MSMEs will help to infuse much-needed liquidity in the sector and help these units address their cash flow problems. This move will prove crucial for MSMEs to kickstart business activities and provide job protection to employees. -
Mahesh Singhi, Founder & MD, Singhi Advisors
Moot question is how quick these Rs 3 lakh crore worth loans can be sanctioned, disbursed - Anil Bhardwaj
The moot question is how quick these Rs 3 lakh crore worth loans can be sanctioned and disbursed. Subordinate debt is also very important, large part of the MSMEs will be facing problems and this will help them turn the story around. For the definition of MSMEs the government has taken the middle path and taken the turnover plus investment guide in deciding the definition of MSMEs. (on CNBC TV18)
Not only fiscally responsible but also specifically aimed to connect weaker dots in economy - Jimeet Modi
One of the most astute stimulus package series-1 has been announced by our Finance Minister which is not only fiscally responsible but also specifically aims to connect the weaker dots in the economy. This is to quicken India’s revival as soon as the lockdown eases. Although late, the Government indeed came out with a superior proposition as compared to developed countries when seen in terms of specific targeting and effectiveness thereof. - Jimeet Modi, Founder & CEO, SAMCO Securities & StockNote
Infrastructure sector could be a game-changer - Sandeep Upadhyay, MD – Infrastructure Advisory, Centrum Capital Ltd
Infrastructure sector could be a game-changer acting as a catalyst for the government to not just jump start the economy but also to lead the economy towards a sustained long term growth. Fresh injection of Rs. 90,000 Crs into DISCOMs would certainly lead to financially de-stress them and in turn improve the liquidity for Power Generation companies. This was long due and hopefully would lead to end consumers getting benefited in terms of cheaper tariffs, however that is likely to happen on a medium to long term. Going forward one needs to ensure that Developers and the investors get a clear understanding and the precise details of the upcoming projects to start preparing for it sooner than later. The extension of upto 6 months announced both for ongoing Construction contracts and concessions awarded on PPP model is a welcome move, however Contracting community is awaiting to hear on the outcome of force majeure provisions triggered during the COVID period on the Government contracts. While the intent of the Government demonstrated by augmenting scope of the grand NIP is both ambitious and commendable it is the roll out plan that really matters. -
Sandeep Upadhyay, MD – Infrastructure Advisory, Centrum Capital Ltd.
Rs 3 lakh crore collateral-free loans are necessary - Rajiv Kumar
Finance Ministry is trying to tell that a lot of loans have been given out but they have just not ben taken away right now owing to the lockdown. Banks and NBFCs are listed and they can not just hand out money which is why the Rs 3 lakh crore collateral-free loans are necessary. - Rajiv Kumar, Niti Aayog VC (on ET Now)
Extension for real estate projects under RERA
Adversely impact due to COVID and projects stand the risk of defaulting on RERA timelines. Ministry of housing and urban affairs will advise states and UTs and their regulatory authorities in the following effect:
1) Treat coronavirus as an event of 'force majeure' under RERA
2) Issue fresh project registration certificates automatically with revised timelines
3) Extend the registration and completion date suo-moto by 6 months for all registered projects expiring on or after 25 March without individual applications.
Among other measures, the due date of all income-tax return for financial year 2019-20 will be extended from 31st July, 2020 and 31st October, 2020 to 30th November, 2020 and Tax audit from 30th September, 2020 to 31st October,2020. All pending refunds to charitable trust and non-corporate business and professionals including proprietorship, LLP and co-operative shall be issued immediately.
TDS and TCS rates cut by 25% till 31st March 2021; Will release Rs 50,000 crore liquidity
In order to provide more funds at the disposal of the taxpayers, the rates of Tax Deduction at Source (TDS) for non-salaried specified payments made to residents and rates of Tax Collection at Source (TCS) for the specified receipts shall be reduced by 25% of the existing rates. The move will result in Rs 50,000 crore liquidity, said the finance minister Nirmala Sitharaman in her speech.
Extension of registration and completion date of real estate projects under RERA
The Ministry of housing and urban affairs will advise States/UTs and their Regulatory Authorities to extend the registration and completion date suo-moto by 6 months for all registered projects expiring on or after 25th March, 2020 without individual applications.
Central agencies will provide an extension of up to 6 months to contractors
In what can be called a major relief to contractors, all Central agencies will provide an extension of up to 6 months, without cost to contractor, to obligations like completion of work covering construction and goods and services contracts. Government agencies to partially release bank guarantees, to the extent contacts are partially completed to ease cash flow.
Rs 90,000 crore liquidity injection for DISCOMs
To give a fillip to DISCOMs with plummeting revenue and facing an unprecedented cash flow problem, Government has announced Rs 90,000 Crore as Liquidity Injection for DISCOMs. With demand reduction, DISCOMs are facing an unprecedented cash flow problem.
Rs 45,000 crore partial credit guarantee scheme for NBFCs
The government announces Rs 45,000 crore liquidity infusion through a Partial Credit Guarantee Scheme 2.0 for NBFCs: FM Nirmala Sitharaman
Rs 30,000 crore special liquidity scheme for NBFCs, MFIs and HFCs
The government launches a Rs 30,000 crore Special Liquidity Scheme for non-banking financial companies, microfinance companies, housing finance companies. Under this scheme investment will be made in both primary and secondary market transations in investment grade debt paper for NBFCs, HFCs and MFIs.Securities will be fully guaranteed by the government.
EPF contribution reduced for business and workers for 3 months, a liquidity support of Rs 6750 crore
In order to provide more take home salary for employees and to give relief to employers in payment of PF, EPF contribution is being reduced for businesses & workers for 3 months, amounting to liquidity support of Rs 6750 crores: Finance Minister Nirmala Sitharaman
Rs 2500 crore EPF support fr business and workers for three more months
To ease financial stress as businesses get back to work, Government decides to continue EPF support for business & workers for 3 more months providing a liquidity relief of Rs 2,500 crores: Finance Minister Nirmala Sitharaman. The move is expected to help 3.67 establishments or 72 lakh employees with a liquidity relief of Rs 2500 crore.
All receivables of MSMEs will be cleared by government in 45 days
E-Market linkage for SMEs since trade fairs and exhibitions may not be held post coronavirus in place of trade fairs, all receivables to be cleared within next 45 days, the finance minister Nirmala Sitharaman said.
Global tenders to be disallowed upto Rs 200 crore
Global tenders to be disallowed in government procurement up to Rs 200 crore. This will make India self-reliant and will also boost the make-in-India initiative. Necessary amendments will be made to the General Financial Rules to this affect, curbing the unfair competition that Indian MSMEs face from foreign firms.
Finance Miinister leaves space for amendment to laws pertaining to MSMEs
With the change in definition for MSMEs the finance minister has also raised the investment limit for these. Along with this, the finance minister has left space for amendments to the law in this context that will be brought. The finance minister has addressed a long-pending demand for revision with this.
Definitions of MSMEs changed and investment revised upwards
Classification - Manufacturing and Servies
Micro - investment less than Rs 1 crore and turnover less than Rs 5 crore
Small - Investment less than Rs 10 crore and turnover of less than Rs 50 crore
Medium - Investment less than Rs 20 crore and turnover less than Rs 100 crore
Equity infusion of Rs 50,000 crore for MSMEs through fund of funds
In the third scheme for the MSME sector, the finance minister said that a fund of funds will be set up for the MSMEs that are viable. The fund of funds will have a corpus of Rs 10,000 crore. The scheme as the finance minister said will help the MSME increase its size.
Second scheme for the MSMEs that are stressed
Under the schemes government will facilitate provisions of Rs 20,000 crore as subordinate debt. Around 2 lakh MSMEs are likely to benefit from this scheme of the government. Those MSMEs that are stressed will be eligible.
Collateral free loans for MSMEs announced by the Finance Minister
Collateral-free automatic loan to be up to Rs 3 lakh crore will be given out to the MSMEs with a time frame of 4 years with a 12 moratorium. 45 lakh MSMEs are to benefit from this scheme. Eligible must have turnover of Rs 100 crore.
Stimulus package as announced by the Prime Minister to come in various tranches
"I shall come out beginning today to come out and discuss various tranches that will be a part of the plan laid out by the Prime Minister," the Finance Minister said, making it clear that the stimulus package will come in various parts for various indutries.
Finance Minister stresses on the aim of the government to help various sectors
"After the July budget we met several times and we made sure to address the needs of various sectors that were felt should be addressed," finance Minister Nirmala Sitharaman said. She added that the aim of the government has been to address issues of various sectors since it has come to power.
Focus on ease of doing business in India
Focus is on ease of doing business, ease of compliance, and regulation the finance minister said. She added that India will look to build brands and take them to the global level. She clarified that India will not become isolationist.
FM Sitharaman recalls flagship schemes
FM Sitharaman highlights Direct Benefit Transfer based on Jan Dhan Yojana account; PM Awas Yojana; Ujjwala Yojana; Swacch Bharat Abhiyan; PM Fasal Bima Yojana; PM Kisan Yojana, etc schemes to recall the success of Modi government.
Plan to make India confident in its ability : FM Sitharaman
Addressing a press conference to unveil the plan that was outlined by the Prime Minister yesterday, Finance Minister Nirmala Sitharaman said, 'The plan is to make India confident in its abilities not isolate India from the world. We have the ability to contribute to the world as we have seen recently." She added that the integration to global value chain is a part of the plan laid by the Prime Minister.
This economic package is for our cottage industry, home industry, our small-scale industry, our MSME : PM Modi
This economic package is for our cottage industry, home industry, our small-scale industry, our MSME, which is a source of livelihood for millions of people, which is the strong foundation of our resolve for a self-reliant India. This economic package is for that labourer of the country, for the farmers of the country who are working day and night for the countrymen in every situation, every season. This economic package is for the middle class of our country, which pays taxes honestly and contributes to the development of the country. This economic package is for Indian industries, which are determined to give a boost to the economic potential of India. Starting tomorrow, over the next few days, the Finance Minister will give you detailed information about this economic package inspired by the 'Self-reliant India campaign'.
- PM Modi in his address to the nation on May 12
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