Aatmanirbhar Bharat Abhiyan – Summary
As we were all eagerly waiting on how the FM will spend off Mr. Modi`s 20 Lakh Crores kitty, here is the summary of announcements.
Although todays package mostly revolved around MSMEs, It can broadly divided into 6 categories as below;
- NBFC & MFI and Discoms
- Real Estate
- Direct Tax
- In a most welcomed move, FM announced the revision of MSME norms which were long overdue. The revised MSME criteria looks as below now:
Micro: Limit revised upward Investment upto 1 cr. or Turnover upto 5 cr.
Small: Limit revised upward Investment upto 10 cr. or Turnover upto 50 cr.
Medium: Limit revised upward Investment upto 20 cr. or Turnover upto 100 cr.
Note: There is no Differentiation between Manufacturing and service enterprises.
However, this still looks lesser compared to the current economic growth India had witnessed prior to Covid setback.
- Collateral Free Automatic Loan to MSME. No guarantee required. Period 4 Years. No principal repayment for 1 year.
- Stressed MSME: Subordinate Debt 20,000 crore
- MSME doing viable business: 50,000 cr. equity infusion for expansion
- Government Tenders: Global tenders will be disallowed upto 200 cr.
- E-market linkage for MSME. Within next 45 days all payments will be made to MSME.
- Government to continue to contribute PF for firms with 100 staff, earning less than Rs 15,000
- To provide more take-home salaries and increase cash-in-hand for employers statutory PF contribution reduced from 12% to 10%. However for state PSUs, govt will continue to pay 12%, while govt staff pays 10%
- Liquidity relief to be given for all EPF establishment
- Govt support towards EPF contribution extended by another 3 months – June, July, August
- Relief of Rs 2,500 crores to be provided to benefit 70.22 lakh employees
3. NBFC, MFI and Discoms
- Rs 30,000 crore special liquidity scheme announced
- Investment to be made in primary & secondary investments
- The debt papers will be fully guaranteed by government of India
- Government announces Rs 45,000 crore liquidity infusion through a Partial Credit Guarantee Scheme 2.0 for NBFCs
- Emergency liquidity injection of Rs 90,000 crore to Discoms
- All GoI agencies, such as railways, roadways, will provide 6 month extension to contractors
- No cost extension of upto six months for govt contractors to comply with contract conditions construction work, goods and services contract, completion of work
5. 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
- All pending refunds to charitable trusts, non-corporate business, LLPs and co-operatives will be processed immediately
- Due date of all IT Return filings extended from July 31 to November 30
- Vivaad say Vishwas scheme extended upto December 31, 2020. No extra payment sought.
- Date of assessments getting barred as on September 30, 2020 now being extended to December 31, 2020. Those getting barred on March 31, 2021 extended by six months.
- In order to provide more funds at the disposal of the taxpayers, 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.
Mr. Modi has pledged almost 10% of the nation`s GDP towards this package, matching that of the developed countries like Germany. However, two questions looms on the horizon, how will the govt raise funds to nurture this ambitious package, and will it be enough?? What do you think?