Key takeaways: Know which sector gets what in economic package

Union Finance Minister Nirmala Sitharaman said that the Economic package is to spur growth and build a self-reliant India while giving details of Rs 20 lakh cr stimulus. Know what are the major announcements made.

New Delhi: Finance Minister Nirmala Sitharaman on Wednesday said that the Economic package is to spur growth and build a self-reliant India while giving details of Rs 20 lakh cr stimulus.

She further said that five pillars of 'Atmanirbhar Bharat' are economy, infrastructure, system, demography and demand.

Here are the key announcements made:

MSME Sector

Measures for MSMEs

• To provide stressed MSMEs with equity support, Government will facilitate provision of Rs. 20,000 cr as subordinate debt.
• Rs 50,000 cr. Equity infusion for MSMEs through Fund of Funds; to be operated through a Mother Fund and few daughter funds; this will help to expand MSME size as well as capacity.
• Collateral Free loan for MSME sector, size of loan package is Rs 3 lakh crore. SMEs will be able to avail a four year period loan, 100% credit guarantee given to banks on principal and interest. Facility will be open till 31st October 2020, No guarantee fees, it will benefit 45 lakh units.
  

  Measures for MSMEs
• Definition of MSMEs gets a revision, Investment limit to be revised upwards, additional criteria of turnover also being introduced
  

  New defination of MSMEs
• Tenders up to Rs 200 crores will no longer be on global tender route. It means for govt tenders worth up to Rs 200 crore, global tenders will be disallowed. It means local industry will be given exclusive rights for govt tenders worth Rs 200 crore or less.
• CPSEs and Govt of India will clear all the receivables (their pending bills for the job done by them or for the supplies being made by them) will be cleared in 45 days.

EPF measures

• To ease financial stress as businesses get back to work, Government decides to continue EPF Support for Business & Workers for 3 more months providing a liquidity relief of Rs 2,500 crore.
  

  EPF measures
• In order to provide more take home salary for employees and to give relief to employers in payment of PF, EPF contribution is being reduced for businesses & workers for 3 months, amounting to a liquidity support of Rs 6750 crores. It will cover 4.3 crore employees in 6.5 lakh establishments. It is for those employees and employers not covered under the scheme.
  

  EPF measures
• The contribution is reduced to 10% for both employees and employers, however, in case of Govt employees, they can opt for 10% contribution but their employers like departments and CPSEs will continue to pay 12%.

NBFC, HFCs, MFIs

• Government launches a Rs 30,000 crore Special Liquidity Scheme for NBFCs/HFCs/MFIs. It will be investment in debt papers, it means if these company issue bonds, then they will be purchased. It will not only be for high quality but for investment quality also. These investments will be fully guaranteed by Govt of India.
  

  Measures for NBFC, HFCs, MFIs
• Government announces Rs 45,000 crore liquidity infusion through a Partial Credit Guarantee Scheme 2.0 for NBFCs. It is an existing scheme but is being expanded, first 20% loss will be borne by Govt of India. Investors can invest into AA and below rated debt papers, even in unrated papers.
  

  Measures for NBFC, HFCs, MFIs

Power Distribution Companies (DISCOMS)

Measures for Power Distribution Companies (DISCOMS)

• To give a fillip to DISCOMs with plummeting revenue and facing an unprecedented cash flow problem, Government announces Rs. 90,000 Crore Liquidity Injection for DISCOMs.

Measures for Contractors

• In a major relief to contractors, all 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.
  

  Measures for Contractors
• A govt agency will partially release the bank guarantee taken from a contractor to the extent of the work completed. It will release their liquidity bank. It means, if for award of contract of Rs 50 crore, the contractor was required to give a guarantee of Rs 10 crore or 20% of the contract value. Now the bank guarantee will be released in proportion of the work completed.

Real Estate

Measures for Real Estate Sector

• Ministry of Housing and Urban Affairs will advise States/UTs and their Regulatory Authorities to extend the registration and completion date suo-moto by 6 months for all registered projects expiring on or after 25th March, 2020 without individual applications.

TDS/TCS Relief

TDS/TCS Relief

• Government to infuse Rs 50,000 crores liquidity by reducing rates of TDS, for non-salaried specified payments made to residents, and rates of Tax Collection at Source for specified receipts, by 25% of the existing rates.

Direct Tax Measures

• Due date of all income-tax return for FY 2019-20 will be extended from 31st July, 2020 & 31st October, 2020 to 30th November, 2020 and Tax audit from 30th September, 2020 to 31st October,2020.