Our Honorable Prime Minister Shri Naraendra Modiji announced a Special Rs. 20 lakh crore special economic package equivalent to almost 10% of India’s GDP, for making the country ‘Atmanirbhar’ (a self-reliant or nation) as the country has suffered economically due to COVID 19 impact. This has to be achieved by standing on five pillers which are ECONOMY, INFRASTRUCTURE, TECHNOLOGY DIRVEN SYSTEM, VIBRANT DEMOGRAPHY AND DEMAND
His key focus was on make available required land, labour (HR) reforms, provide financial liquidity and rationalization of laws to be suitably oriented, to inclue MSMEs, Cottage industries with industries, using the JAM (jandhan, Adhaar and Mobile) which is being effectively being used by his Government to avoid lekage of benefits, and improving on Supply chain management for Agriculture, and more focus on MAKE in INDIA by being VOCAL FOR LOCAL.
This was followed by unveiling the COVID19 ECONOMIC PACKAGE by our Finance Minister Smt.Nirmala Sitaraman, broken into small bits of 30 mins. Each over a period of five days…..
A Highlight of the said package in a very simple language has been reproduced below with explanations wherever necessary for easy understanding..
CHAPTER 1 – MSMEs: MSME SECTOR:
- 3.00 LAKH CRORES Collateral free loans for MSMEs to be provided from Banks/NBFCs upto 20% of their entire outstanding credit as on 29th Feb 2020.
- Borrowers having a loan outstanding of Rs.25.00 Crs. And Turnover of upto Rs.100 Crs. Will be eligible
- 4 year Tenure with a moratorium of 12 months on principle repayment.
- Scheme will be in operation upto October 31st 2020.
Already the same has been approved by the CABINET
- Provision of Subordinated debt for Stressed MSMEs up to 20,000 Cr. Promoters to be provided with debts, which will in turn to be infused as equity by them.
EQUITY FUNDING OF MSMEs:
- By setting up Fund of Funds (FoF) with a corpus of Rs. 10,000 crore.
- Identify MSMEs with Growth potential and viability and provide equity funding.
- To help MSMEs expand their capacity and encourage them to get listed on Stock exchanges
BROADBASING OF MSMEs:
- Eliminate distinction between manufacturing and service sector as in addition to investment limit, Turnover criteria is added in the definition of MSME.
- ‘Micro’ if the investment is up to Rs. 1 crore and turnover up to Rs 5 crore;
- ‘Small’ if the investment is up to Rs 10 crore and turnover up to Rs 50 crore.
- ‘Medium’ if the investment is up to Rs 20 crore and turnover up to Rs 100 crore.
PROVIDING LEVEL PLAYING FIELD:
- No more Global tenders for Public Procurements upto Rs.200.00 Crores, thereby enabling MSMEs to avoid unfair competition from Foreign enterprises.
- Reduction in EPF contribution for the next 3 months (OVERALL 6 MONTHS)
- Statutory PF contribution for both employee and employer reduced to 10% from 12% for establishments covered by the EPFO.
CHAPTER II – NBFC’S HFC’S AND MFI’S
- Special liquidity infusion of up to Rs 30,000 crore to Non Banking Financial Companies (NBFCs), Housing Finance Companies (HFCs) and Micro Finance Institutions (MFIs).
- By Investing in Primary/Secondary market transactions in investment-grade debt paper of these institutions.
- In addition, the Government has announced Rs 45,000 crore partial credit guarantee scheme for NBFCs under which 20 per cent of losses would be borne by the guarantor, the government of India in this case.
CHAPTER III – REAL ESTATE PROJECTS:
PROVIDING RELEIF MEASURES:
- Extension of date of completion of projects by 6 months to all RERA registered projects for those projects which falls due on or after 25th March 2020, in automatic route.
- To enable the buyers to get delivery of their booked units with new timelines removing uncertainity.
CHAPTER IV – ELECTRICITY DISTRIBUTION SUPPLY COMPANIES:
- Central Government to infuse Rs.90,000 Cr. against receivables to augment liquidity
- This to be utilized for discharging liabilities to Electricity Generation Companies.
- This may help DISCOMs to reduce the cost per unit, and benefit may be passed on to consumers.
CHAPTER V – GENERAL:
- Extention of the credit-linked subsidy scheme up to 31-03-2021
- benefits more than 2.5 lakh middle-class families
- helps in generating employment opportunities in the real estate sector
CAMPA FUND UTILISATION:
- Job creation by utilization of Rs.6000.00 Cr. in CAMPA FUNDS (Compensatory Afforestation Fund Act)
- State Governments to utilize these funds towards afforestation and plantation work, forest management and similar activities
- Creates job opportunities in urban, semi-urban and rural areas,
SUPPORT FOR STREET VENDORS:
- A Scheme valued at Rs.5000.00 Cr. to be set up to provide credit facility to Street vendors
- Rs.10000.00 credit facility per Street Vendor to restart his business.
- Reduction in TDS/TCS rates by 0.25% for the period from 14-05-2020 to 31-03-2021
- Helps in liquidity in the hands of businesses and postponement of tax obligation
- To give temporary reprieve by way of liquidity to self-employed, professionals and senior citizens earning interest income or rental income.
- all pending refunds to a charitable trust and non-corporate businesses and professions would be released soon.
EXTENTION OF DUE DATES FOR COMPLIANCES:
- Due dates of all income-tax returns for the Financial Year 2019-20 extended from 31-07-2020 (Salary, non audit returns) and 31-10-2020 to 30-11-2020 (Corporate and Tax audit returns.
- Due dates for tax audit under section 44AB has been extended from 30-09-2020 to 31-10-2020.
- Last date for opting for Vivad se Vishwas Scheme without paying additional 10 per cent of the disputed tax till 31-12-2020.
- The due date of 30-09-2020 for completion of assessments has been extended to 31-03-2020. Where assessments are getting barred on 31-03-2021, they shall be extended to 30-09-2021.
- The Central Board of Indirect Taxes and Customs (CBIC) has extended the timeline for payment of dues under the Sabka Vishwas (Legacy Dispute Resolution) Scheme to 30-06-2020.
Initiatives by SEBI:
- halved the fee charged from brokers and also from companies coming out with public issues and rights issues during 01-06-2020 to 31-12-2020.
- For issues of over Rs 5,000 crore, the fee will be halved to Rs 2.50 crore plus 0.0125 per cent of the portion exceeding Rs 5,000 crore.
- As regards the rights issue, there will be a flat fee of Rs 25,000 if the issue size is less than Rs 10 crore (Rs 25 crore after 21-04-2020). In case the size of the rights issue is more than Rs 10 crore (Rs 25 crore after 21-04-2020), the fee would be 0.025 per cent, down from 0.05 per cent.
- for buy-back of shares it will be Rs 2.5 lakhs if the offer size is less than Rs 10 crore and 0.25 per cent if it is more than Rs 10 crore but less than Rs 1,000 crore, If the size of the buy-back offer is more than Rs 1,000 crore, the fee will be Rs 2.50 crore plus 0.0625 per cent of the portion of the offer size in excess of Rs 1,000 crore.
- SEBI has also relaxed procedural matters relating to Takeovers and Buy-back of securities