FM Nirmala Sitharaman unveils first part of booster measures for revival of economy

Finance Minister Nirmala Sitharaman on Wednesday shared initial details of the Rs 20 lakh crore special economic package which was announced last night by Prime Minister Narendra Modi.

FM said, “The special Economic Package outlined by PM Modi envisions to spur growth and build a self-reliant India. An Aatmanirbhar Bharat will have five key pillars – economy, infrastructure, system, demography & demand.”

“Initiatives of the Govt like Direct Benefit Transfer, PM Awas Yojana, PM Ujjwala Yojana, swachh bharat have been transformative reforms & have benefited the poor in a big way,” Sitharaman added.

Sitharaman further said, “Beginning today, for the next few days, I shall be coming with the entire Finance ministry team to detail the PM’s vision for Aatmanirbhar Bharat.”

Announcing various measures for the MSME sector, FM said, “Government will provide Rs 3 lakh crores Collateral-free Automatic Loans for Businesses, including MSMEs.”

FM Sitharaman also announced a revised definition of MSMEs, with the investment limit to be revised upwards & additional criteria of turnover also being introduced.

“Stressed MSMEs will be provided Rs. 20,000 crores through subordinate debt, which will benefit about 2 lakh Micro, Small and Medium Enterprises,” FM added.

FM said, “Rs 50,000 cr. Equity infusion for MSMEs through Fund of Funds; to be operated through a Mother Fund and few daughter funds; this will help to expand MSME size as well as capacity.”

Seamless e-market linkages across the board will be provided to MSMEs, considering their inability to participate in trade fairs due to COVID19. All pending payments to MSMEs, from central govt. bodies & PSUs to be done within the next 45 days.

In addition to this, all Global tenders will be disallowed in government procurement for tenders up to Rs 200 crore. This will address unfair competition being faced by MSMEs, and enable them to participate actively in government purchases.

“Government will also launch a Rs 30,000 crore Special Liquidity Scheme for NBFCs/HFCs/MFIs, who are finding it difficult to raise money in debt markets. The government will also provide Rs 45,000 crore liquidity infusion through a Partial Credit Guarantee Scheme 2.0 for NBFCs,” FM added.

FM Sitharaman further said, “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 & Workers for 3 months, amounting to liquidity support of Rs 6750 crores. To ease financial stress as businesses get back to work, the Government decides to continue EPF Support for Business & Workers for 3 more months providing a liquidity relief of Rs 2,500 crore.”

“We ensured that Rs 18,000 crore of refund was given to all taxpayers, the intention being that liquidity should be in the hands of the people. 14 lakh taxpayers have benefited from this,” FM added.

To give a fillip to DISCOMs with plummeting revenue and facing an unprecedented cash flow problem, Government announced Rs. 90,000 Crore Liquidity Injection for DISCOMs.

In a major relief to contractors, all Central agencies to provide an extension of up to 6 months, without cost to contractor, to obligations like completion of work covering construction and goods and services contracts.

Govt will advise States/UTs and their Regulatory Authorities to extend the registration and completion date suo-moto by 6 months for all registered projects expiring on or after 25th March 2020 without individual applications.

The government will also 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.