Prime Minister Narendra Modi on Tuesday announced the offering of a massive special economic package to rebuild the economy after Coronavirus crisis. Continuing with the dissemination of the information regarding the special package, Finance Minister Nirmala Sitharaman addressed the nation today.
As PM Modi already hinted on the emphasis of package on land, labor, liquidity and laws, Finance Minister elaborated more on the package. Finance Minister started with revisiting some of the schemes brought by the Central Government in the past six years. Some of those schemes included the Direct Benefit Transfer, Micro-insurance schemes, PM Awas Yojana, PM Ujjwala Yojana, Swachh Bharat and Ayushman Bharat.
"Today's tranche has 15 different measures. Six of these are for MSMEs, two are for EPF, two for NBFCs and MFIs, one to discoms, one to contractors, one real estate, three tax measures," Sitharaman said. The Ministry will be laying out plans for each sector day by day.
Key Highlights of the Speech
-
Collateral-free automatic loan for MSMEs. The loans will be worth Rs 3 lakh crore worth and for a tenure of 4 years. 100% credit guarantee will be given to banks and NBFCs on principal and interest. The scheme is valid until October 31,2020
-
For stressed MSMEs, Rs 20,000 crore liquidity will be given through subordinate debt-based scheme. The government to provide Rs 4,000 crore to CGTMSE.
-
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. This is done to help MSMEs expand capacity and eventually get listed.
-
Definition of MSMEs to be changed in favor of the MSMEs. Investment limits are revised upwards and criteria of turnover brought in to define MSMEs. Manufacturing and service-bases MSMEs to now enjoy same benefits
-
Government to take up PF for firms with 100 staff, earning less than Rs 15,000.
-
e-Market linkage for msmes in the absence of trade fairs post COVID-19. All receivable to be cleared in 45 days by the GoI and CPSEs.
-
Liquidity relief to be provided to all EPF establishments.
-
For NBFCs, Rs 30,000 crore special liquidity scheme has been announced.
-
For cash-desperate discoms, emergency liquidity injection of Rs 90,000 crore has been given.
-
For contractors, all GoI agencies, such as railways, roadways, will provide 6 month extension to contractors.
-
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.
