Union Finance Minister Nirmala Sitaraman has announced that more of the government initiatives relating to the Rs 20 lakh crore package will be unveiled in the next few days.
Here are the key announcements made by FM Sitharaman on 13 May.
Rs 3 lakh crores collateral-free automatic loans for businesses, including MSMEs
Borrowers with up to Rs 25 crore outstanding and Rs 100 crore turnover eligible.
Loans to have 4-year tenor with a moratorium of 12 months on principal repayment Interest to be capped.
100 per cent credit guarantee cover to banks and NBFCs on principal and interest.
Scheme can be availed till 31st October 2020.
No guarantee fee, no fresh collateral.
45 lakh units can resume business activity and safeguard jobs.
Rs 50,000 cr equity infusion for MSMEs through fund of funds
Fund of funds with corpus of Rs 10,000 crores will be set up.
Will provide equity funding for MSMEs with growth potential and viability.
FoF will be operated through a Mother Fund and few daughter funds.
Funds structure will help leverage Rs 50,000 cr of funds at daughter funds level.
Will help to expand MSME size and as well as capacity.
Will encourage MSMEs to get listed on main board of Stock Exchanges.
Rs 2500 crore EPF support for Business and workers for 3 more months
Under Pradhan Mantri Garib Kalyan Package, payment of 12% of employer and 12% employee contributions was made into EPF accounts of eligible establishments.
This was provided earlier for salary months of March, April and May 2020.
This support will be extended by another 3 months to salary months of June, July and August 2020.
This will provide liquidity relief of Rs 2500 crore to 3.67 lakh establishments and for 72.22 lakh employees.
EPF contribution reduced for business and workers for 3 months–Rs 6750 crores liquidity support
Statutory PF contribution of both employer and employee will be reduced to 10% each from existing 12% each for all establishments covered by EPFO for next three months.
CPSEs and State PSUs will however continue to contribute 12% as employer contribution.
This scheme will be applicable for workers who are not eligible for 24% EPF support under PM Garib Kalyan package and its extension.
Rs 30,000 crore special liquidity scheme for NBFCs/HFCs/MFIs
The government will launch a Rs 30,000 crore special liquidity scheme.
Under this scheme investment will be made in both primary and secondary market transactions in investment grade debt paper of NBFCs/HFCs/MFIs
Will supplement RBI/Government measures to augment liquidity.
Securities will be fully guaranteed by the government of India.
This will provide liquidity support for NBFCs/ HCI/MFIs and mutual funds and create confidence in the market.
Rs 50,000 crores liquidity through TDS/TCS rate reduction
In order to provide more funds at the disposal of the taxpayers, the rates of Tax Deduction at Source (TDS) for non-salaried specified payments made to residents and rates of Tax Collection at Source (TCS) for the specified receipts shall be reduced by 25% of the existing rates.
Payment for contract, professional fees, interest, rent, dividend, commission, brokerage, etc. shall be eligible for this reduced rate of TDS.
This reduction shall be applicable for the remaining part of the FY 2020-21 i.e. from tomorrow to 31st March, 2021.
This measure will release Liquidity of Rs. 50,000 crore.
Other Direct Tax Measures
All pending refunds to charitable trusts and noncorporate businesses & professions including proprietorship, partnership, LLP and Co-operatives shall be issued immediately.
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.
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.
Period of Vivad se Vishwas Scheme for making payment without additional amount will be extended to 31st December, 2020.
Rs 90000 crore liquidity injection for DISCOMs
PFC/REC to infuse liquidity of Rs 90,000 cr to DISCOMs against receivables.
Loans to be given against state guarantee for exclusive purpose of discharging liablities of Discoms to Gencos.
Digital payments facility by Discoms for consumers, liquidation of outstanding dues of state governments, plan to reduce financial and operational losses.
Central Public Sector Generation Companies shall give rebate to Discoms which shall be passed on to the final consumers (industries).
Relief to contractors
Extension of up to 6 months (without costs to contractor) to be provided by all central agencies (like Railways, Ministry of Road transport and Highways, Central Public Works dept etc).
Covers construction/works and goods and services contracts.
Covers obligation like completion of work, intermediate milestones etc and extension of concession period in PPP contracts.
Government agencies to partially release bank guarantees to the extent contracts are partially completed to ease cash flows.
