Finance Minister Nirmala Sitharaman on Wednesday announced 15 measures to revive and support business under the Rs 20 lakh crore stimulus package announced by Prime Minister Narendra Modi on Tuesday.
Giving details about the measures, the minister said that six are exclusively meant for the MSME sector, while the others pertain to real estate, NBFCs, and income taxpayers. Attempts have also been made via these measures to decrease the regulatory burden on companies while increasing the take-home pay of employees.
Six major steps for the revival of the MSME sector
1. Collateral free loan of Rs 3 lakh crores for MSMEs. This will benefit 45 lakh units so that they can resume work and save jobs.
2. For stressed MSMEs, the Subordinate debt provision of Rs 20,000 cr has been announced for 2 lakh MSMEs. It will benefit those which are NPAs or stressed MSMEs.
3. Rs 50,000 crore equity infusion through Mother fund-Daughter fund for MSMES that are viable but need handholding. A fund of funds with a corpus of Rs 10,000 crore will be set up to help these units expand capacity and help them list on Markets if they choose.
4. The definition of MSMEs has been revised to allow MSMEs to aim for expansion and not lose benefits. Also, there’ll be no distinction between the manufacturing & services sector MSMEs.
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.
5. Global tenders will be disallowed up to Rs 200 crore for government contracts.
6. Will ensure e-market linkages are provided across the board in the absence of non-participation in trade fairs due to COVID-19. Govt of India and PSUs will clear all the receivables in the next 45 days.
7. A liquidity relief of ₹2,500 crores EPF support is being given to all EPF establishments, EPF contribution will be paid by Govt. of India for another 3 months till August and will benefit more than 72 lakh employees.
8. Statutory EPF contribution for all organizations and their employees covered by EPFO has been reduced to 10% from 12% earlier. This doesn’t apply to govt organizations. This will infuse Rs 6,750 cr liquidity into these organizations.
9. Rs 30,000 crore special liquidity scheme for investing in investment-grade debt paper of NBFCs, HFCs, and MFIs. These NBFCs are those that are also funding MSMEs. These will be fully guaranteed by the government of India.
10. Rs 45,000 crore partial credit guarantee scheme 2.0 for NBFCs. The first 20% loss will be borne by the guarantor that is the government of India.
11. For Discoms, a one-time emergency liquidity injection of Rs 90,000 crore against all their receivables. The states will guarantee it.
12. An extension of up to 6 months (without costs to the contractor) to be provided by all Central Government Agencies like Railways, Ministry of Road Transport & Highways, Central Public Works Dept.
13. On real estate, urban development ministry will issue advisory to states/UTs so that the regulators can invoke force majeure. The regulators can suo moto extend completion/registration dates for six months for projects expiring on or after March 25, 2020.
14. A reduction of 25% of existing rates of Tax Deducted at Source (TDS) & Tax Collection at Sources (TCS) from tomorrow till March 31, 2021. This will release Rs 50,000 crores.
15. 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.