Wednesday, May 13, 2020

FM Nirmala Sitharaman Press Conference : PM's 'Aatmanirbhar' Economic Package

PM's Aatmanirbhar Economic Package
20 Lakh Grote Economic Package

On Tuesday at 8:00 pm, the Prime Minister Narendra Modi announced the 'Aatmanirbhar Bharat' economic package of Rs 20 lakh core i.e. 10% of India's GDP, that will focus on making India as a self-reliant country in the world economy. Today, Nirmala Sitharaman has addressed the press to detail the Rs 20 lakh crore economic package to overcome the economic crisis during the coronavirus (COVID-19) pandemic. These are the highlights of that press conference –

Union Finance Minister Nirmala Sitharaman said the announcements will be made in different tranches. Today's tranche will include measures as follows: 6 are for MSMEs, 2 are for EPF, 2 for NBFCs and MFIs, 1 for discoms, 1 for contractors, 1 for real estate sector, and 3 tax measures.

This Rs 20 lakh crore figure, however, includes the previous Rs 1.7 lakh crore stimulus package announced by Finance Minister Nirmala Sitharaman and steps taken by the Reserve Bank of India (RBI) since lockdown began on March 24 midnight. These earlier measures now together with today's first tranche to Rs 7.79 lakh crore of the complete package. Rest of the package will be announced in time.

"The prime minister laid out a comprehensive vision, and that vision was laid out after wide consultations with several sections of the society," says Finance Minister Nirmala Sitharaman.

Government will launch a Rs 30,000 crore special liquidity scheme for NBFCs/HFCs/MFIs. This will provide liquidity support to them. Finance Minister also announces Rs 45,000 Crore Partial Credit Guarantee Scheme 2.0 for NBFCs.

The government will provide Rs 3 lakh crore collateral-free automatic loans for businesses, including SMEs to soften the devastating impact of coronavirus and the lockdown on the economy. Union Finance Minister Nirmala Sitaraman says "Essentially this is to spur growth to build a very self-reliant India and that is why this initiative is called Atmnirbhar Bharat Abhiyaan." She also include, "This loan is for 4 year tenure and is 100 per cent guaranteed. This will last till October 21, 2020. It will benefit 45 lakh units, allowing them to resume activity and safeguarding jobs."

Finance Minister Sitharaman announces Rs 20,000 crore loan for stressed MSMEs. It is obvious that the stressed MSMEs need equity support. The government will facilitate provision of Rs 20,000 crore as subordinate debt, which will benefit 2 lakh MSMEs. Functioning MSMEs, which are NPA or are stressed will be eligible. The government will provide support of Rs 4,000 crore to CGTMSE.

Government of India, Central Agencies like Railways, Ministry of Road Transport and Highways, Central Public Works Department will extend the registration and completion sou moto by 6 months for all registered projects expiring on or after 25 March, 2020, and will Issue fresh project registration certificates automatically with revised timelines. These measures will de-stress real estate developers and ensure completion of projects. Nirmala Sitaraman also says that government agencies will partially release bank guarantees to the extent of the completed contract so that cash flow improves to facilitate greater liquidity.

"Indian MSMEs and other companies have often faced unfair competition from foreign companies. Therefore, global tenders will be disallowed in Govt procurement tenders upto Rs 200 crore. Necessary amendments of General Financial Rules will be effected. This will be a step towards self reliant India and support Make in India. This will also help MSMEs to increase their businesses," says FM.

"Sixth step for MSMEs is that post COVID-19, since trade fairs and exhibitions will be difficult, we will provide e-market facilities. The Government of India and Central Public Sector Enterprises (CPSE) will honour every MSME receivable in the next 45 days," says Sitharaman.

TDS and TCS rates for non-salaried specific payments  is reduced by 25 percent, in order to provide more funds at the disposal of the taxpayer. This is applicable on the payments like interest, rent, brokerage, fees, dividend, commission etc. This will be enforced from tomorrow till 31st March, 2021. As Nirmala Sitharaman says, this reduction on TDS and TCS rates will release Rs 50,000 crore in hands of people.
To ease financial stress as businesses get back to work, government decides to continue EPF support for business and workers for 3 more months providing a liquidity relief of Rs 2,500 crores, says finance minister.

Statutory PF contribution by employer reduced to 10 percent from 12 percent earlier, to provide Rs 6,750 crorw liquidity relief.

"All pending refunds of charitable trust, non-profit business, cooperatives and small partnerships, shall be issued immediately. Due date of all IT returns for FY19-20 from July 31, 2020 and October 31, 2020 extended till November 31, 2020. Tax audits extended from September 30, 2020 till October 31, 2020. Date of assessments getting barred as of September 2020 is extended till December 2020. Those getting barred on March 31, 2021 are being extended till September 31,  2021. Vivad se Vishwas scheme is being extended till December 31, 2020 without any additional amount," says Sitharaman.

Due date for all income tax returns extended to November 30, 2020.

No comments:

Post a Comment