NEW DELHI: To announce the economic benefits that the Rs. 20 lakh crores boost would entail for Indian industries, Nirmala Sitharaman, Union Finance Minister highlighted the government’s plan to make Indian economy more self-reliant soon. The government is looking to promote indigenous manufacturing and, thus, consumption in the near future to promote the economy in the future. “Atmanirbhar India does not mean India is to be an isolationist country,” the Minister clarified.
The government is envisioning a country where the focus is more on indigenous production and consumption, hence making the nation more self-reliant. The Finance Minister along with Anurag Thakur, Minister of State (MoS) for Finance and Corporate Affairs, said that she will be announcing economic benefits for the industries in the coming days. Today they highlighted the 6 major reforms that the government will be implementing to boost up the Micro, Small, Medium Enterprises- MSMEs in India.
6 major steps for MSME
- A Collateral free automatic loan for MSMEs worth Rs. 3 lakh crores has been announced for a time frame of 4 years with a 12 moratorium. 45 lakh MSMEs are to benefit from the scheme. MSMEs who have Rs.25 crore outstanding loans or have a turnover of below Rs.100 crore can avail till 31 October.
- Emergency credit line- 20,000 crore subordinate debt was announced. This will address the problem of equity and around 2 lakh MSMEs with below-average performance can benefit from the scheme. Non Performing Assets (NPAs) and stressed MSMEs would be eligible.
- A Fund of Funds will be set up. Inducing 50,00 crores equity. The corpus would be about Rs 10,000 crores for the subordinate loan. Benefitting MSMEs when having potential and viable and need financial support due to the lockdown. This will help the MSMEs expand their business.
- The Government will also be changing the definition of MSME to eliminate the risk of stepping over the pre-defined limit of the business. Investment limit revised upwards. Additional criteria based on turnover has also been brought in. Investment for Micro units revised from 25 lakhs to 1 crore, same would be applicable for both manufacturing and service enterprises. Small enterprises are now defined as 10 crore investment and having 50 crore turnover, medium 20 crore investment and 100 crore turnover.
- Tenders for Government procurement up to 200 crores will no longer be listed globally.
- MSMEs will also be allowed to utilise e-commerce platforms via e-market links. The MSMEs would be given their dues within the coming 45 days, whether from Government agencies or otherwise. An EPF support of Rs 2500 crore for business and workers for three more months was also announced.
Further announcements that are to benefit the rest of the industries are:
- For the NBFCs, FM Sitharaman has announced a special liquidity scheme and Rs 45,000 crore as a partial credit guarantee scheme. The government has also set aside Rs 90,000 for discoms, to reduce their stress.
- 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 & workers for 3 months, amounting to liquidity support of Rs 6750 crores. Further, Rs 30,000 crore special liquidity scheme for NBFCs, MFIs and HFCs, non-banking companies was also announced. Further, an Rs. 45,000 crore partial credit guarantee scheme was also announced for NBCFs
- Central agencies will be extending the contracts for various contractors undertaking government projects to 6 months.
- Registration and Completion dates for projects filed under RERA expiring on or after 25th March, 2020 would be extended for 6 months further.
- TDS and TCS rates will be cut down by one-fourth or 25 per cent till 31 March 2021. This will result in Rs 50,000 crore liquidity, the FM confirmed.
- A liquidity injection of Rs 90,000 crore into DISCOMs with incomes affected by the lockdown also announced.