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Prime Minister Narendra Modi announced a Rs 20 lakh-crore stimulus package to make India more self-reliant amid the coronavirus pandemic, as part of the ‘Aatma Nirbhar Bharat Abhiyaan’.
The allocated amount is almost 10 per cent of India’s GDP.
The economic package focused on land, labour, liquidity and laws and will include the monetary easing announced by the Reserve Bank of India.
The finance minister, who was flanked by the MoS Anurag Thakur and the finance ministry officials, said that the Aatma NIrbhar Bharat rests on five pillars: Economy, Infrastructure, Technology-driven systems, Demography and Demand. The focus will be on factors of production: Land, Labour, liquidity and Laws. The intention is to make local brands global.
Major steps for the revival of the MSME sector
- 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.
- For stressed MSMEs, 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.
- Rs 50,000 crore equity infusion through Mother fund-Daughter fund for MSMES that are viable but need hand holding. A fund of funds with 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.
- Definition of MSMEs has been revised to allow MSMEs to aim for expansion and not lose benefits. Also, there’ll be no distinction between 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.
- Global tenders will be disallowed up to Rs 200 crore for government contracts.
- Will ensure e-market linkages are provided across the board in the absence of non-participation in trade fairs due to Covid. Govt of India and PSUs will clear all the receivables in next 45 days.
For Employees
- A liquidity relief of ₹2,500 crore 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.
- Statutory EPF contribution for all organisations and their employees covered by EPFO has been reduced to 10% from 12% earlier. This doesn’t apply to govt organisations. This will infuse Rs 6,750 cr liquidity into these organisations.
For NBFCs/HFCs/MFIs
- Rs 30,000crore 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.
- Rs 45,000 crore partial credit guarantee scheme 2.0 for NBFCs. The first 20% loss will be borne by the guarantor that is government of India.
- For Discoms, a one-time emergency liquidity injection of Rs 90,000 crore against all their receivables. The states will guarantee it.
Other Details
- An extension of up to 6 months (without costs to contractor) to be provided by all Central Government Agencies like Railways, Ministry of Road Transport & Highways, Central Public Works Dept.
- On real estate, the 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.
- 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.
- 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.
- All pending refunds to charitable trusts and non-corporate businesses & professions including proprietorship, partnership, LLP and Co-operatives shall be issued immediately.
Measures for supporting the poor, including migrants, farmers, tiny businesses and street vendors
- Free food grains supply to migrants for 2 months.
- Technology system to be used enabling Migrants to access PDS (Ration) from any Fair Price Shops in India by March,2021-One Nation one Ration Card. 100% National portability will be achieved by March, 2021. This is part of PM’s Technology Driven System Reforms .
- Scheme for Affordable Rental Housing Complexes for Migrant Workers and Urban Poor to be launched. Affordable Rental Housing Complexes will provide social security and quality life to migrant labour, urban poor, and students etc.
- Government of India will provide Interest subvention of 2% for prompt payees for a period of 12 months to MUDRA Shishu loanees, who have loans below Rs 50,000.The current portfolio of MUDRA Shishu loans is around Rs 1.62 Lakh crore. This will provide relief of about Rs 1,500 crore to Shishu MUDRA loanee.
- A special scheme will be launched within a month to facilitate easy access to credit to Street vendors, who are amongst the most adversely impacted by the present situation for enabling them to restart their businesses. Under this scheme, bank credit facility for initial working capital up to Rs. 10,000 for each enterprise will be extended. This scheme will cover urban as well as rural vendors doing business in the adjoining urban areas. Use of digital payments and timely repayments will be incentivized through monetary rewards. It is expected that 50 lakh street vendors will be benefitted under this scheme and credit of Rs. 5,000 crore would flow to them.
- Rs 70,000 crore boost to housing sector and middle income group through extension of Credit Linked Subsidy Scheme for MIG under PMAY(Urban)The Credit Linked Subsidy Scheme for Middle Income Group (annual Income between Rs 6 and 18 lakhs) will be extended up to March 2021.
- Rs 6,000 crore for Creating employment using CAMPA funds that will be used for Afforestation and Plantation works, including in urban areas, Artificial regeneration, assisted natural regeneration, Forest management, soil & moisture conservation works, Forest protection, forest and wildlife related infrastructure development, wildlife protection and management etc.
- Rs 30,000 crore Additional Emergency Working Capital for farmers through NABARD for meeting crop loan requirement of Rural Cooperative Banks and RRBs. This refinance will be front-loaded and available on tap. This is over and above Rs 90,000 crore that will be provided by NABARD to this sector in the normal course. This will benefit around 3 crore farmers, mostly small and marginal and it will meet their post-harvest Rabi and current Kharif requirements.
- Rs 2 lakh crore credit boost to 2.5 crore farmers under Kisan Credit Card Scheme. Fisherman and Animal Husbandy Farmers will also be included in this drive. This will inject additional liquidity of Rs 2 lakh crore in the farm sector. 2.5 crore farmers will be covered.
