Union Finance Minister announces plans for 20 lakh cr. economic relief package

Gangtok, May 14: The Finance Minister, Nirmala Sitharaman on May 13 announced the first set of economic relief measures under the government’s Atmanirbhar Bharat Abhiyan (self-reliant India campaign)— following the Prime Minister Narendra Modi’s announcement of Rs. 20 lakh crore stimulus package. The Finance Minister through the press conference informed of new measures to recuperate […] The post Union Finance Minister announces plans for 20 lakh cr. economic relief package appeared first on The Sikkim Chronicle - Sikkim News.

Union Finance Minister announces plans for 20 lakh cr. economic relief package

Gangtok, May 14:

The Finance Minister, Nirmala Sitharaman on May 13 announced the first set of economic relief measures under the government’s Atmanirbhar Bharat Abhiyan (self-reliant India campaign)— following the Prime Minister Narendra Modi’s announcement of Rs. 20 lakh crore stimulus package. The Finance Minister through the press conference informed of new measures to recuperate the impact on the Indian economy due to the coronavirus pandemic. The main agenda of the press conference was providing relief to small businesses, non-bank lenders and power distribution companies. The package essentially is to ignite growth, enhance demand and to create a self-reliant India with five pillars- economy, infrastructure, system, demography and demand.

The following are the dominant announcements made by the Finance Minister in the May 13 press conference:

  • Definition of MSMEs (Micro, Small and Medium Enterprises) has been revised so that they do not need to worry about growing in size and still avail of the benefits. Rs 3 lakh crore collateral-free loans for MSMEs, having a 4-year tenure and moratorium of 12 months have been introduced for MSMEs which will be backed by the Centre government. These loans will be available till October 31, 2020, and will be 100 per cent credit guaranteed. To provide relief to stressed MSMEs with equity support, the government will facilitate the provision of Rs 20,000 crore as subordinate debt. Funds of up to Rs 50,000 crore for equity support to MSMEs with growth potential.

  • EPFO support provided by the central government has been extended for another three months till August. EPF support for business and workers has been extended for the next 3 months, providing liquidity relief of Rs 2,500 crore. Statutory PF contribution for those not covered earlier is being reduced to 10 per cent from 12 per cent. The reduction is not for the Central government.

  • A special liquidity scheme of up to Rs 30,000 crore has been announced for NBFCs, housing financiers and micro financiers have been launched. Investments in both primary and secondary markets, to buy even investment-quality debt papers to ease the flow of credit. Partial credit guarantee scheme for NBFCs has also been expanded.

  • Power distributor companies will be given a one-time liquidity injection of Rs 90,000 crore to pay off their dues to power generation firms. This will be against receivables and will enable Discoms to pay generation companies. They will eventually pass on benefits to customers.

  • Ministry of Housing and Urban Affairs will issue advisory to states and UTs enabling invocation of force majeure / Act of God measure during COVID-19 period, for all registered real estate projects expiring on or after March 25, 2020. Real estate developers allowed to invoke the ‘force majeure’ clause and extend registration and completion dates by six months.

  • Rates for tax deducted at source and tax collection at source has been reduced from May 14 till March 31, 2021, TDS/TCS (tax deducted at source/tax collected at source) will be reduced by 25% of the existing rate and will be applicable to all payments. It will release Rs 50,000 crore in the hands of the people instead of paying them as taxes.

  • The due date for filing income tax returns has been extended. For FY 2019-20 will be extended from July 31, 2020, & October 31, 2020, to November 30, 2020, and Tax audit from September 30, 2020, to October 31, 2020.

  • 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.

  • Global tenders will be disallowed in government procurement for tenders up to Rs 200 crore, in order to make India self-reliant.


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