Finance Minister Nirmala Sitharaman has revealed the economic package in the first tranche. Prime Minister Shri Narendra Modi had yesterday announced an economic package of ₹20 lakh crore amid coronavirus lockdown.
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Prime Minister’s Vision
Call for Atmanirbhar Bharat or Self Reliant India Movement.
Five pillars of Atmanirbhar Bharat Economy, Infrastructure, System, Vibrant Demography & Demand.
Special economic and comprehensive package of Rs 20 lakh crores equivalent to 10 % of India s GDP.
Package to cater to various sections including cottage industry, MSMEs, labourers, middle class, industries, among others.
Bold reforms across sectors will drive the country’s push towards self reliance. It is time to become vocal for our local products and make them global.
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 & poor Divyang.
Pradhan Mantri Garib Kalyan Package 2
Front loaded Rs 2,000 paid to farmers under existing PM KISAN to benefit 8.7 crore farmers . Building and Construction Workers Welfare Fund allowed to be used to provide relief to workers.
24% of monthly wages to be credited into their PF accounts for next three months for wage earners below Rs 15,000 p.m. in
businesses having less than 100 workers.
5 crore workers registered under Employee Provident Fund (EPF) to get non refundable advance of 75% of the amount or 3 months of the wages, whichever is lower, from their accounts.
Limit of collateral free lending to be increased from Rs 10 to Rs 20 lakhs for Women Self Help Groups supporting 6.85 crore households.
Sanctioned Rs 15,000 crores for Emergency Health Response Package. Issued all the pending income tax refunds up to ₹5 lakh , immediately benefiting around 14 lakh taxpayers.
Extending last date for Income Tax Returns to June 30, 2020. Relaxation for 3 months for debit cardholders to withdraw cash free from any ATMs, etc. Reduction of Cash Reserve Ratio (CRR) has resulted in liquidity enhancement of ₹1,37,000 crores.
Businesses Including MSMEs
Rs 3 lakh crores Collateral free Automatic Loans for Business, including MSME. Rs 20,000 crore Subordinate Debt for MSMEs. Rs 50,000 cr equity infusion through MSME Fund of Funds. Global tender to be disallowed upto Rs 200 crores.
Other interventions for MSMEs. Rs 2500 crores EPF support for Businesses & Workers for 3 more months.
Collateral Free Automatic Loan to MSME. No guarantee required. Period 4 Years. No principal repayment for 1 year.
Stressed MSME: Subordinate Debt 20,000 crore. MSME doing viable business: 50,000 cr. equity infusion for expansion
Definition of MSME changed:
a. Micro: Limit revised upward Investment upto 1 cr. or Turnover upto 5 cr.
b. Small: Limit revised upward Investment upto 10 cr. or Turnover upto 50 cr.
c. Medium: Limit revised upward Investment upto 20 cr. or Turnover upto 100 cr.
d. No difference in manufacturing and service sector for Micro Enterprises
5. Government Tenders: Global tenders will be disallowed upto 200 cr.
6 Major Steps for MSME
1) Standard MSME :
Collateral free automatic loans to MSME – Rs. 3Lakhs Crore – 45 lakh MSME beneficiaries. Current MSME having existing loan of Rs. 25 Crores or Turnover of Rs. 100 Crores can avail this. Loan tenure 4 years. 1st year No principal repayment. Only Interest to be paid.
2) Stressed MSMEs / NPA
Rs. 20,000 Lakhs Crores provision. Beneficiaries 2 Lakhs MSME (No details mentioned on EMI EMI etc)
3) Viable doing MSMEs:
To help them growth, 5,000 Lakh Crores Equity Infusion, Mother Daughter MSME support system.
4) MSME definition redefined
Investment limit increased
Micro – 25 Lakh to 1 Crore, Small – upto 10 Crore, Medium – upto 20 Crore
EPF contribution reduced for Business & Workers for 3 months Rs 6750 crores. Statutory PF contribution of both employer and employee will be reduced to 10 each from existing 12 each for all establishments covered by EPFO for next 3 months. EPF for June, July & August will be paid by Government (72,22,000 employees will be benefited).
Rs. 3 lakh crores Collateral free Automatic Loans for Businesses, including MSMEs
45 lakh units can resume business activity and safeguard jobs.
Rs. 20,000 crores Subordinate Debt for Stressed MSMEs. CGTMSE will provide partial Credit Guarantee support to Banks.
Rs. 50,000 Crores Equity infusion for MSMEs through Fund of Funds. Global tenders to be disallowed
upto Rs 200 crores. This will be a step towards Self Reliant India and support Make in India. Rs
Rs. 2500 crore EPF Support for Business & Workers for 3 more months.
Rs 30,000 crore Special Liquidity Scheme for NBFCs/HFCs/MFIs. Rs 45,000 crore Partial Credit Guarantee Scheme 2.0 for NBFCs. Rs 50,000 crores liquidity through TDS/TCS rate reduction. Due date of all income tax return for FY 2019 20 will be extended from 31 st July, 2020 , 31 st October, 2020 to 30th November, 2020 and Tax audit from 30th September, 2020 to 31 st October, 2020.
Discom: Liquidity crisis. Rs. 90,000 cr. infused for improving Liquidity crises. This amount will be paid by PFC and REC.
Contractors: Extension upto 6 months to comply with contract conditions.
Real Estate: Coviid 19, an event of ‘Force Majeure’. Registration and Completion extended for 6 months for all projects expiring o or after 25.03.2020.
Construction, Goods & Services Govt. Contracts stalled due to COVID:
6 months extension to comply to contract completion.Partial Bank Gurantees to be released by Govt for part of the construction completed.
Tax Audit date extended to 31 October 2020 from 30 September 2020.
Assessment time bared upto 30Sep2020 extended to 31Dec2020. 31Mar2021 to 31Dec2021
Period of Vivad se Vishwas Scheme for making payment without additional amount will be extended to 31 st December, 2020.