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Aatmanirbhar Bharat Abhiyan: From MSME, EPF to NBFCs, key takeaways from FM’s announcement today

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Finance Minister Nirmala Sitharaman announced the historic package and stimulus for the MSME sector .

She said that the package has been announced after discussions within various sections of the society.

It will give growth and build self reliance in India. The Aatmanirbhar Bharat Abhiyan is based on 5 pillars – Economy, infrastructure, system, vibrant demography and demand.

45 lakh industries will get benefited. For the rest few days, every day, new packages will be announced. Today, 15 new announcements were made. Finance Minister Nirmala Sitharaman also announced that the government will provide Rs 3 lakh crore collateral-free automatic loans for businesses, including SMEs.

This comes as part of the Rs 20 lakh crore economic relief package announced by Prime Minister Narendra Modi on Tuesday to handle the devastating impact of COVID-19 pandemic and the lockdown on the Indian economy.

6 packages for the MSME sector are as follows:

1) Collateral-free Automatic Loan for MSMEs: The finance ministry announces 3 lakh crore collateral-free automatic loan for MSMEs.

This loan is for 4 year tenure and is 100 per cent guaranteed. This will last till October 21, 2020. It will benefit 45 lakh units, allowing them to resume activity and safeguarding jobs.

2) Finance Minister Sitharaman announces Rs 20,000 crore loan for stressed MSMEs. The provision of Rs 20,000 crore as subordinate debt, which will benefit 2 lakh MSMEs will also be provided.

3) For MSMEs needing handholding, a Rs 50,000 crore infusion will be made through ‘fund of funds’, to expand their capacity.

4) Revision of the definition of MSMEs has been changed. Investment limits to be revised upwards with necessary amendments to the law being made. Distinction between manufacturing and service will be eliminated.

5) Global Tenders will be Disallowed for government procurement – Upto Rs 200 Cr. Will help MSMEs to do business with confidence. Make in India will be promoted.

6) E-linkages to be provided to all MSMEs so that they can participate in trade fairs.
The Government of India and Central Public Sector Enterprises (CPSE) will honour every MSME receivable in the next 45 days.

Apart from the MSME sector, the finance minister also announced Rs 2500 Cr EPF Support package. This will ease financial stress for businesses and workers for 3 more months.

1) EPF contribution reduced for businesses and workers for 3 months. Rs 6750 crore liquidity support to be given.

PF contribution reduced to 10% for employee and employer for next 3 months. CPSEs/States PSUs will continue at 12%.

2) 30,000 crore special liquidity scheme for NBFC/HFC/MFIs.

3) Rs 45,000 Cr Partial Credit Guarantee Scheme 2.0 for NBFCs.

4) Rs 90K Cr Liquidity Injection for DISCOMs.

5) Relief to Contractors: extension of upto 6 months. Covers construction/works and goods and services contracts.

6) Extension of Registration & Completion Date of Real Estate Projects Under RERA by 6 months for all registered projects expiring on or after 25 March, 2020.

7) TDS Rates Reduced by 25%, applicable on all payments – interest, rent, brokerage, supply, etc. ir starts with immediate effect till March 31, 2021.

8) Rs 50,000 crore liquidity through TDS/TCS rate reduction will be provided.

9) All pending refunds of charitable trust, non-profit business, cooperatives and small partnerships, shall be issued immediately.

Due date of all I-T returns for FY19-20 from July 31, 2020 and October 31, 2020 extended till November 31, 2020.

Tax audits extended from September 30, 2020 till October 31, 2020.

Apart from the above, the period of Vivad se Vishwas scheme has been extended till December 31, 2020 without any additional amount.

Hence, these were the 15 relief announcements that were made by the FM today.

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