Union Finance Minister Nirmala Sitharaman on Wednesday, 13 May 2020, disclosed the first set of measures of the financial package worth ₹20 lakh crore. She announced that the PM laid down the vision of 'Atmanirbhar' India (self-reliant India) after multiple dialogues with several sectors of the society.
Sitharam stated that the focus of the package is on the factors of production - land, labour, liquidity and others. The aim is to take the local brands and build them to a global level. Recalling the Direct Benefit Transfer reforms, PM Awaz Yojana, Ujjwala Yojana, Swachh Bharat Yojana, Ayushmann Bharat scheme, PM Fasal Bima Yojana, PM Kisan Yojana, PSB clean-up, GST reforms, power sector reforms undertaken in the Modi government's tenure so far, Sitharaman observed that they were the base on which a self-reliant India has been created.
The measures announced by the Union Finance Minister are as follows,
- ₹3 lakh crores collateral-free automatic loans for business, including MSME-Emergency credit line extended to businesses including MSMEs from banks and NBFCs up to 20% of outstanding credit as on February 29,2020. This is set to benefit 45 lakh units.
- ₹20,000 crores subordinated debt for MSMEs- Centre will facilitate the provision of Rs. 20,000 crore as subordinate debt for stressed MSMEs. 2 lakh MSMEs are likely to benefit.
- ₹50,000 crore equity infusion through MSME Fund of Funds- As MSMEs face a severe shortage of equity, the Fund of Funds with a corpus of Rs. 10,000 crore shall be set up. This shall provide equity funding for MSMEs with growth potential and encourage them to get listed on the main board of Stock Exchanges.
- The new definition of MSMEs- The definition of MSMEs has been revised whereby investment limit shall be revised upwards. Also, an additional criterion for turnover is being introduced. Necessary amendments to the law will be brought about.
- Global tenders to be disallowed up to ₹200 crores- Global tenders shall be prohibited in government procurement tenders up to ₹200 crores as Indian companies have faced unfair competition from foreign companies. This is a crucial step towards a self-reliant India.
- Other interventions for MSMEs- The Union government and Central Public Sector Enterprises will honour every MSME receivable in the next 45 days.
- ₹2500 crores EPF support for business and workers for 3 more months- The payment of 12% of employer and 12% of employee contributions made into the EPF accounts of eligible establishments shall continue for the months of June, July and August. Overall, liquidity relief of ₹2500 crore will be provided to 72.22 lakh employees.
- EPF contribution reduced for business and workers for 3 months- Statutory contribution of both employer and employee shall be reduced to 10% each from the existing 12% each for all establishments covered under EPFO. This move shall provide liquidity of ₹6750 crore to employees and employers over a period of 3 months.
- Tax measures like pending refunds to charitable trusts, an extension of the due date of income tax returns, an extension of date of assessment getting barred and extension of the period of Vivad se Vishwas scheme.
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