Finance Minister Nirmala Sitharaman announces ₹20 lakh crore economic package.
Finance Minister Nirmala Sitharaman held a press conference on Wednesday.
She said that Prime Minister Narendra Modi laid out a comprehensive vision yesterday. “That was laid out after wide and deep consultation, with several sections of society, and different levels of govt up to the PM. Essentially, this is to spur growth and to build a very self-reliant India (Atmanirbhar Bharat) — which will be resting on 5 important pillars — economy, infrastructure, technology, demographics and demand.”
Mr. Modi on Tuesday had announced an economic stimulus package for ₹20-lakh-crore (estimated at 10% of the GDP), with a clearly defined leap towards economic reforms that will, in his words, lead to Atmanirbhar Bharat, or a self-reliant, resilient India.
Ms. Sitharaman said she will address issues of land, labour, liquidity and law. The intention of the Ministry is to build local brands, and integrate them into global supply chain and not meant to look inwards and cut India to be an isolated country, but to continue contributing to the globe.
“Self-reliant India does not mean cutting off from rest of the world. Many reform driven steps are successfully taken by this govt, from 2014-19. For the poor, brought in DBT based reforms, based on Jan Dhan, Aadhaar and mobile technology, which has helped deliver to migrants now,” she added.
The Finance Minister listed a number of reforms.
Agriculture reforms: PM Fasal Bima Yojana, PM Kisan Yojana, New Fisheries department, Krishi Sinchayee Yojana
Business reforms: PSB clean-ups and recpitalisation, IBC reforms, GST reforms, FDI reforms, ease of doing business, electricity and airport reforms, cleaning up coal mine sector.
“14 lakh taxpayers benefited from clearing of refund dues”
The FM said that the announcements are based on the existing foundation of reforms.
“Within hours of lockdown, PMKGY was announced. So far, ₹18,000 crore worth grain and rice transfers have happened, and also, pulses. Ration also distributed to non-card-holders. Ujjwala gas connections were given, and cash transfers were made to Jan Dhan accounts,” she said.
“Changing definition of MSME in favour of the MSMEs”
₹3 lakh crores collateral-free automatic loans for businesses, particularly MSMEs.
Collateral free loan to be provided to SMEs with 12 month moratorium; 45 lakh units to benefit, she said, announcing parts of the economic package.
For stressed MSMEs, Government to facilitate provision of ₹20,000 crore subordinate debt for equity support. 2 lakh MSMEs likely to benefit.
For MSMEs who may be doing viable business but need handholding because of current situation, the govt announces ₹50,000 crore equity infusion via ‘fund of funds’. This will be operated through ‘mother fund’ and a few ‘daughter funds’.
“The MSME definition has been revised. Investment limit will be revised,” Ms. Sitharaman said.
Press Information Bureau tweeted this image showing the revised definitions.
Definition of MSMEs gets a revision, Investment limit to be revised upwards, additional criteria of turnover also being introduced#AatmanirbharBharat pic.twitter.com/euRNgiPJeB— PIB India #StayHome #StaySafe (@PIB_India) May 13, 2020
The Minister listed the other parts of the economic stimulus package.
For govt procurement, global tenders will be disallowed for tenders up to ₹200 crore. Within the next 45 days, all pending payments from government and CPSEs to MSMEs will be cleared.
The earlier announced EPF support for businesses and employees extended till August 2020. This will provide liquidity relief of ₹2,500 crore. EPF contribution for all businesses and workers reduced to 10% from 12% for next three months.
For NBFCs/MFIs, govt to launch ₹30,000 crore special liquidity scheme. Discoms today are facing unprecedented challenge. In all states they are facing serious crisis.
We are making a one time provision by PFC and REC to infused ₹90,000 crore liquidity for discoms against receivables.
All contractors engaged by the govt will be given an extension of up to 6 months.
To help destress developers, the urban development ministry will issue advisory to states and UT, where in their regulatory authorities be asked to extend registration and completion date for all registered projects expiring on or after March 25, suo moto by 6 months.
TDS and TCS rates cut 25% for 2020-21. Will release liquidity of ₹50,000 crore for non-salaried tax payers.
Prime Minister Narendra Modi’s pledge of a total spending of ₹20 lakh crore to weather the fallout of coronavirus pandemic is among the largest economic stimulus package announced by nations around the world.
Mr. Modi’s Atma-nirbhar Bharat Abhiyan or Self-reliant India Mission is about 10% of India’s GDP in 2019-20 and would rank behind Japan, the US, Sweden, Australia and Germany.
With inputs from The Hindu