Government's financial package: Big relief for MSMEs, Indian taxpayers

India's finance minister Nirmala Sitharaman said today that the financial package announced by PM Modi during his televised address to the nation on Tuesday is meant to spur "growth and build a self-reliant India" as part of "Atmanirbhar Bharat".. 

Five pillars of "Atmanirbhar Bharat" include - economy, infrastructure, system, demography and demand, India's finance minister said.

"Self reliant India does not mean cutting off from rest of the world," Sitharaman said while giving details of Rs 20 lakh crore stimulus package.

"We shall not forget that we do have a responsibility towards the poor, needy, the migrant workers, and the aged," the finance minister added.

Major announcements:

-Rs 3 lakh crores collateral-free automatic loans for businesses, including SMEs. 

-Borrowers with up Rs 25 crore outstanding and Rs 100 crore turnover are eligible. 

-Collateral free automatic loans to MSMEs worth Rs 3 lakh crore. It will have a 4-year tenure valid up to October, 2020.

-Collateral free loan to be provided to SMEs with 12-month moratorium; 45 lakh units to benefit, the finance minister said while unveiling parts of the economic package.

-Rs 20,000 crore subordinate debt will be provided to stressed MSMEs, which is set to benefit 2 lakh businesses.

-Rs 50,000 crore equity infusion through MSME Fund of Funds to provide support to growth potential MSMEs.

-Sitharaman announced Rs 30,000 crore liquidity facility for NBFCs, housing finance companies and MFIs.

-Rs 45,000 crore liquidity to be infused in NBFCs through partial credit guarantee scheme.

For Taxpayers:

-Rs 18,000 cr refunds given to taxpayers; 14 lakh taxpayers benefit from the clearing of refund dues.

-The government also extended the due date for all income tax returns to November 30.

-Statutory PF contribution by employer reduced to 10 per cent from 12 per cent earlier to provide Rs 6,750 crore liquidity relief.

Businesses & workers: 

-To ease financial stress as businesses get back to work, the government has decided to continue EPF support for business & workers for three more months providing a liquidity relief of Rs 2,500 crores.

-TDS, TCS rate for non-salaried payments for period up to March 31, 2021 cut by 25 per cent in order to release Rs 50,000 crore.

Infrastructure: 

-With electricity distribution companies facing a serious crisis, the government announced emergency liquidity infusion of Rs 90,000 crore in discoms.