Union Finance Minister Nirmala Sitharaman on Wednesday unveiled the details of the Rs 20 lakh crore economic package under ‘Atmanirbhar Bharat Abhiyan’ announced by Prime Minister Narendra Modi in his address to the nation on Tuesday night.
Beginning her speech with a beautiful set of translations in Tamil, Malayalam, Telugu and Kannada for ‘Atmanirbhar Bharat Abhiyan’, Finance Minister Nirmala Sitharaman addressed the press conference to divulged details of the economic stimulus.
Finance Minister Sitharaman said the mission of Atmanirbhar Bharat Abhiyan is not to look inwards but to build a confident India which can rest on its strength and also contribute to global growth. The Finance Minister added that the mission is essentially to spurt growth and to build a very self-reliant India. This is why this whole initiative is called Atmanirbhar Bharat Abhiyan, added Finance Minister Nirmala Sitharaman.
Finance Minister Nirmala Sitharaman said that the Rs 20 lakh crore economic package will focus on land, labour, capital and enterprise. Five pillars of ‘Atmanirbhar Bharat’ are – economy, infrastructure, system, demography and demand” reiterated Sitharaman.
The Finance Minister also said that the mission is to get local brands to a global level. She added, “The Direct Benefit Transfer, Microinsurance schemes, PM Awas Yojana, PM Ujjwala Yojana, Swachh Bharat and Ayushman Bharat were all transformative reforms which have benefited the poor in a big way”.
Modi government is responsive, sensitive: Finance Minister
The Finance Minister said the Modi government has responded countless times to calls. “You are speaking to a responsive, sensitive government. Within hours of the lockdown announced by the PM, the Garib Kalyan Yojana was announced,” she added.
The government has also ensured that Rs 18,000 crore of refunds was given through a special drive to all taxpayers says Finance Minister.
Beginning today, over the next few days we will come before you (media) with team to put forth PM’s vision, said Finance Minister.
Relief to Micro, Small and Medium Enterprises (MSMEs)
In a major initiative, Finance Minister Nirmala Sitharaman announced Rs 3 lakh crores Collateral-free Automatic Loans for Businesses, including Micro, Small and Medium Enterprises (MSMEs). FM Sitharaman announced that collateral-free automatic loan to MSMEs will be given for a four-year tenure with 100% credit guarantee. The collateral-free loan is available till 31st October, said Finance Minister. The scheme will benefit 45 lakh units, allowing them to resume activity and safeguarding jobs, said Sitharaman.
“To provide stressed MSMEs with equity support, Modi government will facilitate the provision of Rs 20,000 crore as subordinate debt. Two lakh MSMEs are likely to benefit,” said Finance Minister.
She added, “All NPAs or stressed MSMEs are eligible for the scheme. The government will provide Rs 4,000 crore to CGTMSE who will provide a partial guarantee to banks who will then give benefit to stressed MSMEs”.
The Finance Minister also said that an additional Rs 50,000 crore equity infusion will be done for MSMEs through Fund of Funds. It will be operated through a Mother Fund and few daughter funds, which will help to expand MSME size as well as capacity, Finance Minister Nirmala Sitharaman.
FM Sitharaman also said that the definition of the Micro, Small and Medium Enterprises will be changed to benefit the sector so that they can grow in size and get benefits. The investment limit which defined MSMEs revised upwards and additional criteria being brought in are turnover size – earlier differentiation between manufacturing and service MSMEs will be categorised similarly, said Sitharaman.
In a big boost to MSMes, Finance Minister Nirmala Sitharaman on Wednesday announced that global tenders for government procurement tenders will be disallowed for tenders upto Rs 200 crore to enable self-reliant India.
“This will allow MSMEs a chance to supply for these big projects. Small units can be part of government purchases and now Self-reliant India can Make in India,” said Finance Minister Sitharaman.
Finance Minister said that government of Indian, including CPSEs to clear all dues to MSMEs within next 45 days. She also added that e-market linkage to be enabled for MSMEs due to absence of trade fairs and exhibition amidst coronavirus pandemic.
Measures on Employees Provident Fund
Finance Minister Nirmala Sitharaman also announced that Employees Provident Fund (EPF) relief measures for all establishments with Rs 2,500 crore liquidity support. She added that the Modi government will provide both employer and employee – 12% contributions.
She added that the relief will be extended for another three months from March-May 2020 to June-August 2020 as well which will benefit nearly 3.6 lakh establishments benefit and 72.22 lakh employees.
“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 and Workers for 3 months, amounting to a liquidity support of Rs 6750 crores,” the Finance Minister announced.
Non-Banking Financial Companies, Housing Finance Companies and Micro Finance Institutions
The Modi government has also announced of launching Rs 30,000 crore special liquidity scheme to NBFCs, MFIs and HFCs, where government will buy investment grade debt papers.
Finance Ministry also said that investment under the scheme can be made by both primary and secondary market transactions in investment grade debt paper of NBFC/HFC/MFIs.
“For NBFCs, HFCs and MFIs – Rs 45,000 liquidity infusion through a partial guarantee scheme. Will cover commercial papers and borrowings. First 20 per cent loss will be borne by guarantor – GOI. Double AA-rated paper and unrated papers will all be eligible,” announced Finance Minister Sitharaman.
Electric Distribution companies (Discoms)
Announcing relief measures to Electric Distribution companies (Discoms), Nirmala Sitharaman said that to help those discoms which are facing unprecedented cash flow problems, unable to pay to the generation companies, a one-time emergency liquidity infusion of Rs 90,000 crore Power Finance Corporation and Rural Electricity Corporation is provided.
This will be a state-issued guarantee and rebate will be provided to those discoms that pass the benefit to end-customer, said Sitharaman.
Relief to Contractors
Finance Minister Nirmala Sitharaman announced relief measures for contractors. She said that all Union government agencies, such as Railways, highways or central public works, will give three to six months extension to all contractors without extra costs.
This will cover construction work and goods and services contracts, completion of works and intermediate milestones, and also the concessional period in PPP contracts, Finance Minister announced. The government added that to facilitate greater liquidity, government agencies will partially release bank guarantees to the extent of the completed contract so that cash flow improves.
Real estate sector
For the real estate sector, the government announced that the Urban Development Ministry shall issue advisories to states and UTs to treat the coronavirus period as an ‘Act of God’ and thus allow ‘force majeure. The government has also extended the registration and completion date suo-moto by 6 months for all registered projects expiring on or after 25th March 2020 without individual applications.
“These measures will de-stress real estate developers and ensure completion of projects so that homebuyers are able to get delivery of their booked houses with new timelines,” said Finance Minister.
Measures on TDS/TCS
The Modi government also decided to infuse Rs 50,000 crores liquidity by reducing rates of TDS, for non-salaried specified payments made to residents, and rates of Tax Collection at Source for specified receipts, by 25% of the existing rates.
This is applicable on all payments – interest, rent, brokerage, supply, etc, which will be enforced from tomorrow till March 31, 2021. The reduction will release Rs 50,000 crore in the hands of people, added Finance Minister.
Date of filing Income Tax returns for Fiscal Year 19-20 extended
The Modi government announced that all due date of all income-tax return for FY 2019-20 will be extended from 31st July 2020 & 31st October 2020 to 30th November 2020 and Tax audit from 30th September 2020 to 31st October 2020.
“All pending refunds to charitable trusts and noncorporate businesses & professions including proprietorship, partnership, LLP and Co-operatives shall be issued immediately,” she added.
Finance Minister added that the date of assessments getting barred on 30th September 2020 extended to 31st December 2020 and those getting barred on 31st March 2021 will be extended to 30th September 2021. The period of “Vivad se Vishwas Scheme” for making payment without additional amount will be extended to 31st December, Finance Minister added.
‘Atmanirbhar Bharat Abhiyan’ – A mission for self-reliance
In his fifth address to the nation over the Coronavirus pandemic, on Tuesday Prime Minister Narendra Modi announced an economic package under ‘Atmanirbhar Bharat Abhiyan’ amounting Rs 20 lakh crore to revamp the economy which is facing a serious crisis due to the Chinese epidemic. The economic package includes the recent announcements made by the government and the Reserve Bank of India on supporting key sectors of the country.
In his speech, PM Modi said the economic package would be around the 10 per cent of the GDP.
“I announce a special economic package today. This will play an important role in the ‘Atmanirbhar Bharat Abhiyan’. The announcements made by the government on coronavirus, decisions of RBI and today’s package totals to Rs 20 lakh crore. This is 10 per cent of India’s GDP,” PM Narendra Modi said.
The Prime Minister also said the package would help every section of society, including workers, farmers, the middle class, industrial units and the MSME sector.
The stimulus will play an important role in the ‘Atmanirbhar Bharat Abhiyan’ (Self-reliant India Campaign), PM Modi said.
“India’s self-reliance will be based on five pillars — economy, infrastructure, technology-driven system, vibrant demography and demand. When India speaks of self-reliance, it does not advocate for a self-centred system. In India’s self-reliance there is a concern for the whole world’s happiness, cooperation and peace,” PM Modi said in his address.