Atmnirbhar Bharat Abhiyan – Rs 20 lakh crore economic package – Financial Highlights

Finance Minister Nirmala Sitharaman addressed a press conference and unveiled the economic package due to nationwide lockdown because of the spread of the novel coronavirus of Rs. 20 lakh crore for uplifting the economy and making the country self-reliant.

This special economic and comprehensive package of Rs 20 lakh crores is equivalent to 10% of India’s GDP based on five pillars Economy, Infrastructure, System, Vibrant Demography and Demand.

The key highlights of the package of Atmnirbhar Bharat are as follows:

1. Collateral-free automatic loan for MSMEs.

• Rs 3 lakh crore worth loans for those firms with Rs 25 crore outstanding loans or annual turnover is over Rs 100 crores.
• 4 year tenure on the loans moratorium of 10 months to be offered.
• 100% credit guarantee to banks and NBFCs on principal and interest offer valid until October 31,2020.
• No fresh collateral required.
• No extra fee to be charged.

2. For stressed MSMEs.

• Rs 20,000 crore liquidity through subordinate debt-based scheme.
• Govt to provide Rs 4,000 crore to CGTMSE for this.

3. Definition of MSMEs has been revised which is as follows :

4. Fund of funds.

• Infusing Rs 50,000 crore equity into MSMEs for those who are viable and eligible.
• Corpus of Rs 10,000 crore though mother-fund and daughter-fund framework to help MSMEs expand capacity and eventually get listed.

5. Government to take up PF for firms with 100 staff, earning less than Rs 15,000.

6. Global tenders to be disallowed in government procurement upto Rs 200 crores.

7. Post-Covid life

E-market linkages to be provided across the board to help make up for lack of trade fairs within the next 45 days, all receivables of MSMEs will be cleared by the GoI and CPSEs.

8. Relief to EPF

Liquidity relief to be given for all EPF established govt support towards EPF contribution extended by another 3 months – June, July, August.
Relief of Rs 2,500 crores to be provided to benefit 70.22 lakh employees.

9. To provide more take-home salaries and also increase cash-in-hand for employers

Government to take up PF for firms with 100 staff, earning less than Rs 15,000.
Statutory PF contribution reduced from 12% to 10% for state PSUs, govt will continue to pay 12%, while govt staff pays 10%.

10. For NBFCs

• Rs 30,000 crore special liquidity scheme announced Investment to be made in primary & secondary investments.
• The debt papers will be fully guaranteed by government of India.
• Government announces Rs 45,000 crore liquidity infusion through a Partial Credit Guarantee Scheme 2.0 for NBFCs.

11. For cash-desperate discoms

Emergency liquidity injection of Rs 90,000 crore against receivables, guarantees for which will be given by states this is one-time liquidity infusion.

12. For contractors

• All GoI agencies, such as railways, roadways, will provide 6 month extension to contractors.
• No cost extension of upto six months for govt contractors.

13. For real estate

• Covid period should be treated as a force majeure and relax timelines.
• Registration and completion date should be extended suo-moto by 6 months for all registered projects expiring on or after 25th March, 2020 without individual applications.

14. Direct Tax Updates

• All pending refunds to charitable trusts, non-corporate business, LLPs and co-operatives will be processed immediately.
• Due date of all IT Return filings extended from July 31 to November 30 for FY 2019-20.
• TDS/TCS rates reduced by 25% in Non-salary Cases.
• Vivad se Vishwas scheme extended till 31th December.
• 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.