Finance Minister Nirmala Sitharaman on Wednesday held a press conference at 4 pm to discuss the economic stimulus package of Rs 20 lakh crore that Prime Minister Narendra Modi announced a day earlier during his address to the nation. In a major initiative, the government announces Rs 3 lakh crores Collateral-free Automatic Loans for Businesses, including MSMEs, the finance minister announced.
Saying that PM Modi laid out a vision after wide and deep consultations with several sections of society. "These discussions were discussed with various ministries and the PM Modi has considered all the possibilities and the factors regarding the package that is being distributed," she said.
In another major announcement, the finance minister announced that there will be change in the definition of MSME. "You can be a larger-invested company, you will be defined as an MSME," she said. Another criteria i.e. turnover, along with investment size, will also define an MSME. "What was a micro unit i.e. investments of Rs 25 lakh, the investment is now Rs 1 crore," she added.
The package, she added, was to spur growth and build a self-reliant India. "This whole initiative is called Aatma Nirbhar Bharat Abhiyaan," she added.
PM Modi has spoken on five important pillars: economy, infrastructure, tech-driven systems, demography and demand through which India would build Aatma Nirbhar Bharat. "Essentially, we'll be focusing on the factors of production of land, labour, liquidity and law," she said, stressing on PM Modi's speech.
The intention, Nirmala added, was to take local brands and take them to a global level. "Certainly when PM said Aatma Nirbhar Bharat, it doesn't mean that India will not shut itself from the rest of the world, but to become a global leader in ability to hone local brands," she said.
While highlighting the achievements of the 2014-2019 government, led my PM Modi, Nirmala said that the DBT ensured that money was directly deposited into the account of the migrant workers. "Many countries are still unable do this, but India is able to," she said while speaking of other programmes that were focused on taking care of the poor including Ayushman Bharat and Ujala Yojna. "Our government focused on reform-based policies to ensure better living in India," she added.
Nirmlala added that there was a lot discussed during the Budget 2020, but coronavirus lockdown happened a month later. She added that for the next few days, starting today, to explain how the money will be distributed. "The poor and the aged will be our top pirority," she added.
The finance minister also spoke about Rs 20000 crore subordinate debt package for stressed MSMEs. "We will provide the liquidity that will benefit the stressed 2 lakh MSMEs.
The FM added that they will announce Rs 3 lakh crores collateral-free automatic loans for businesses, including SMEs. Borrowers with up Rs 25Cr outstanding and Rs100 Cr turnover are eligible.
Global tenders will also be disallowed for government procurements in case they are Rs 200 crore or less, the finance minister added. "Self-reliant India can be part of the Make in India project while participating in government projects," she added.
Nirmala Sitharaman added that the post COVID-19 scenario will see more e-trade fairs as opposed to regular trade fairs. There will be more such e-market linkage for MSMEs to make ends meet, she said.
Furthermore, liquidity relief is being provided when it comes to employers provident fund. Rs 2,500 crore will be provided by the government of India till the month of August 2020 that will benefit 72.2 lakh employees, she said.
So this means an entire Rs 6,750 crore will be provided to both employee and employer, the finance minister said. "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 and workers for 3 months, amounting to liquidity support of Rs 6750 crores," she explained.
She also added that the government has launched a Rs 30,000 crore Special Liquidity Scheme for non-banking financial companies, micro-finance companies, housing finance companies.
The government has also announced Rs 45,000 crore liquidity infusion through a Partial Credit Guarantee Scheme 2.0 for NBFCs. "In addition, we have given a fillip to DISCOMs with plummeting revenue and facing an unprecedented cash flow problem, the Government announces Rs. 90,000 Crore Liquidity Injection for DISCOMs," the finance minister said.
While speaking of contractors, the Finance Minister said, an extension of up to 6 months (without costs to contractor) to be provided by all Central Agencies (like Railways, Ministry of Road Transport & Highways, Central Public Works Dept, etc).
When it came to taxes, the rates of Tax Deduction at Source (TDS) for non-salaried specified payments made to residents and rates of Tax Collection at Source (TCS) for the specified receipts shall be reduced by 25% of the existing rates. "This reduction shall be applicable for the remaining part of the FY 2020-21 i.e. from tomorrow to 31st March, 2021," the finance minister said.
The last day to file the tax has been extended by another three months. "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," she said.
Furthermore, All pending refunds to charitable trusts and non-corporate businesses & professions including proprietorship, partnership, LLP and Co-operatives shall be issued immediately.
Earlier, PM Modi spoke of the new Rs 20 lakh economic package for a self-independent India. "This is 10 per cent of India's GDP. From tomorrow, everyday FM will address the reforms and it will boost the Make in India initiative," PM Modi added.
PM Modi also took a leaf out of Mahatma Gandhi's book and requested India to buy local products. "Local ke liye vocal hona hai," he said.
Admitting that the coronavirus will be an integral part of our lives for the while, PM also stressed on lockdown 4.0. "On taking advice from the states, we will give you a full low down before May 18," he said.