Today, the Finance Minister Nirmala Sitharaman addressed a press conference to give details on the Rs. 20 lakh crore relief package which was proposed by Indian Prime Minister Narendra Modi yesterday. The economic stimulus package aka Atmanirbhar Bharat Package is proposed to spur economic growth and built a self-reliant India. FM Sitharaman reiterates the PM’s vision on India’s self-reliance and 5 pillars of growth – 1) Economy 2) Infrastructure 3) Technology-driven Systems 4) Demography 5) Demand.
She added, the idea behind self-reliance India is not to become an isolationist country but to build a confident India capable of contributing to the world’s growth.
The relief package worth Rs. 20 lakh crore is equivalent to 10% of India’s GDP is to cater to the various sections:
- Cottage industry
- Industries, among others.
In the press conference, she mentioned all the reform-driven measures taken by the government so far: Direct Benefit Transfer given the Jan Dhan, Aadhaar, Mobile (JAM), PM Awaaz, Ujjwala, Microfinance schemes, Swachh Bharat, Ayushman Bharat.
Key Takeaways from FM Sithraman’s Speech on Rs. 20 Lakh Crore Package
- FM announces an Rs. 3 lakh crore worth collateral-free automatic loan for MSMEs with an annual turnover of over Rs. 100 crore with a 4-year tenure. For that, there will be no extra fee to be charged and no fresh collateral will be required.
- For stressed MSMEs, an Rs. 20,000 crore liquidity proposed through subordinate debt-based scheme and government to provide Rs. 4,000 crore to CGTMSE for this.
- FM said, “Definition of MSMEs is changing, which is in favour of the MSMEs.” According to her, the relief package will change the definition of MSMEs and as there is a long-pending demand for revisions, the investment limits will be revised upwards, the distinction between manufacturing and service sector to be eliminated and necessary amendments to the law will be brought about. According to her, around 45 lakh MSMEs are to benefit from this scheme.
|Micro-Enterprise||Investment <1 crore & Turnover < 5 crore|
|Small Enterprise||Investment <10 crore & Turnover <50 crore|
|Medium Enterprise||Investment <20 crore & Turnover <100 crore|
- She also announced to promote e-market linkages to be provided across the board to make up for trade fairs exhibition.
- FM announced to give liquidity relief to be given for all EPF established. A relief of Rs. 2,500 crores are to be provided to benefit 70.22 lakh employees.
- To provide more take-home salaries and increase cash-in-hand for employers, the government is all ready to take up PF for firms with 100 staff, earning less than Rs. 15,000. Also, the statutory PF contribution to be reduced from 12% to 10%. However, for state PSUs, govt. will continue to pay 12%.
- She also announced, Rs. 45,000 crore liquidity fusion through partial credit guarantees scheme 2.0 for NBFCs.
- As the NBFCs/HFCs/MFIs are finding it difficult to raise money in debt markets, the FM announced an Rs. 30,000 crore special liquidity scheme. Under this, the investments will be made in both primary and secondary market transactions in investment-grade debt paper of NBFCs/HFCs/MFIs. And the securities will be fully guaranteed by the Government of India.
- For contractors, all the Government of India agencies such as railways, roadways, will provide 6 months extension to contractors.
- FM Sitharaman also announced real estate where the 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.