Yesterday Hon’ble Prime Minister Shree Narendra Modi Jee announced a Special economic and comprehensive package of Rs 20 lakh crores – equivalent to 10% of India’s GDP. He gave a clarion call for or Self-Reliant India Movement. He also outlined five pillars of “Aatmanirbhar Bharat” –

1. Economy,

2. Infrastructure,

3. System,

4. Vibrant Demography and

5. Demand.

During the press conference here today, Union Minister of Finance &Corporate Affairs Smt. NirmalaSitharaman said in her opening remarks that Prime Minister ShreeNarendraModiJeehad laid out a comprehensive vision in his address to the Nation yesterday. She further said that after spending considerable time, the Prime Minister has himself ensured that inputs obtained from widespread consultation form a part of economic package in fight against COVID-19.

“Essentially, the goal is to build a self-reliant India that is why the Economic Package is called AatmaNirbhar Bharat Abhiyaan. Citing the pillars on which we seek to build AatmaNirbhar Bharat Abhiyaan, Smt. Sitharaman said our focus would be on land, labour, liquidity and law.

Following measures were announced today:-


A. Rs 3 lakh crore Emergency Working Capital Facility for Businesses, including MSMEs

> An additional Working Capital Finance of 20% of the outstanding credit as on 29 February 2020, in the form of a Term Loan at a concessional rate of interest will be provided.

> Eligibility Criteria

This will be available to units with

– up to Rs 25 crore outstanding and

– Turnover of up to Rs 100 crore whose accounts are standard.

> The units will NOT have to provide any guarantee or collateral of their own. The amount will be 100% guaranteed by the Government of India(BOTH Principal and Interest)

> This loan will be for 4 Yrs tenure with a moratorium of 12 Months on principal repayment.

> Scheme can be availed till 31st October 2020.

> It will providing a total liquidity of Rs. 3.0 lakh crores to more than 45 lakh MSMEs.

B. Rs 20,000 crore Subordinate Debt for Stressed MSMEs

> Provision made for Rs. 20,000 crore subordinate debts for TWO LAKH MSMES which are NPA or are stressed.

> Government will support them with Rs. 4,000 Cr. to Credit Guarantee Trust for Micro and Small enterprises (CGTMSE).

> Banks are expected to provide the subordinate-debt to promoters of such MSMEs lower of the following: –

– 15% of his existing stake in the unit,

– Maximum of Rs 75 lakh

C. Rs 50,000 crores equity infusion through MSME Fund of Funds

> will set up a Fund of Funds with a corpus of Rs 10,000 crore that will provide equity funding support for MSMEs.

> The Fund of Funds shall be operated through a Mother and a few Daughter funds.

> It is expected that with leverage of 1:4 at the level of daughter funds, the Fund of Funds will be able to mobilise equity of about Rs 50,000 crores.

> It will encourage MSMEs to get listed on main board of Stock Exchange

D. New Definition of MSME

> The distinction between manufacturing and service sector will also be eliminated. Definition of MSME will be revised by raising the Investment limit. Additional criteria of turnover also being introduced.


Criteria  :  Investment in Plant & Machinery or Equipment
Classification Micro Small Medium
Manufacturing Enterprise Investment < 25 Lakh Investment < 5 Crore Investment < 10 Crore
Service Enterprise Investment < 10 Lakh Investment < 2 Crore Investment < 5 Crore


Criteria  :  Investment in Plant & Machinery or Equipment And Annual Turnover
Classification Micro Small Medium
Manufacturing & Service  Enterprise Investment < 1 Cr


Turnover  < 5 Cr

Investment < 10 Cr


Turnover  < 50 Cr

Investment < 20 Cr


Turnover  < 100 Cr

> Under Revised criteria the word Plant & Machinery or Equipment excluded and Turnover included.

E. Other Measures for MSME

> E-market linkage for MSMEs will be promoted to act as a replacement for trade fairs and exhibitions.

> Fintech will be used to enhance transaction based lending using the data generated by the e-marketplace.

> Government has been continuously monitoring settlement of dues to MSME vendors from Government and Central Public Sector Undertakings (CPSE).

> MSME receivables from Government and CPSEs will be released in 45 days

F. No Global tenders for Government tenders of up to Rs 200 crores

> Indian MSMEs and other companies have often faced unfair competition from foreign companies.

> Therefore, General Financial Rules (GFR) of the Government will be amended to disallow global tender enquiries in procurement of Goods and Services of value of less than Rs 200 crores.


A. Employees Provident Fund Support for business and organised workers

> The scheme introduced as part of Pradhan Mantri Garib Kalyan Package (PMGKB) under which Government of India contributes 12% of salary eachon behalf of both employer and employee to EPF will be extended by another 3 months for salary months of June, July and August 2020.

> Total benefits accrued are about Rs 2500 crores to 72.22 lakh employees.

B. EPF Contribution to be reduced for Employers and Employees for 3 months

> Businesses need support to ramp up production over the next quarter. It is necessary to provide more take home salary to employees and also to give relief to employers in payment of Provident Fund dues.

> Statutory PF contribution of both employer and employee reduced to 10% each from existing 12% each for all establishments covered by EPFO for next 3 months.

> This will provide liquidity of about Rs. 2,250/- Crore per month


A. Rs 30,000 crores Special Liquidity Scheme for NBFC/HFC/MFIs

> NBFCs/HFCs/MFIs are finding it difficult to raise money in debt markets. So Government will launch Rs 30,000 crore Special Liquidity Scheme.

> Liquidity will be provided by RBI.

> Investment will be made in BOTH Primary and Secondary Market transactions in investment grade debt paper of NBFCs, HFCs and MFIs.

> Securities will be 100 % guaranteed by the Government of India.

B. Rs 45,000 crores Partial credit guarantee Scheme (PGSC) 2.0 for Liabilities of NBFCs/MFIs

> Existing Partial Credit Guarantee scheme is being revamped and now will be extended to cover the borrowings [such as primary issuance of Bonds/CPs (liability side of balance sheets) of such entities] of lower rated NBFCs, HFCs and other Micro Finance Institutions (MFIs).

> AA paper and below including unrated paper eligible for investment (espcially relevant for many MFIs)

> Government of India will provide 20 percent first loss sovereign guarantee to Public Sector Banks.


> Power Finance Corporation and Rural Electrification Corporation will infuse liquidity in the DISCOMS to the extent of Rs 90,000/- crores in two equal installments.

> This amount will be used by DISCOMS to pay their dues to Transmission and Generation companies.

> Loans to be given against State guarantees for exclusive purpose of discharging liabilities of Discoms to Gencos.

> Linkage to specific activities/reforms: Digital payments facility by Discoms for consumers, liquidation of outstanding dues of State Governments, Plan to reduce financial and operational losses.

> Further, CPSE GENCOs will give a rebate to DISCOMS on the condition that the same is passed on to the final consumers as a relief towards their fixed charges.


> All central agencies like Railways, Ministry of Road Transport and Highways and CPWD will give extension of up to 6 months for

– completion of contractual obligations intermediate milestones etc. including in respect of EPC and concession agreements, extension of Concession period in PPP contracts

– construction/ works and goods and services contracts

> Government agencies to partially release bank guarantees, to the extent contracts are partially completed, to ease cash flows


> Ministry of Housing and Urban Affairs will advise States/UTs and their Regulatory Authorities to the following effect: –

– to invoke the Force Majeure clause under RERA,

– The registration and completion date for all registered projects will be extended up to 6 months e. on or after 25th March, 2020 without individual applications,

– Further extended by another 3 months based on the State’s situation.

> Various statutory compliances under RERA will also beextended concurrently.


> The pending income tax refunds to charitable trusts and non-corporate businesses and professions including proprietorship, partnership and LLPs and cooperatives shall be issued immediately.


> Reduction in Rates of ‘Tax Deduction at Source’ and ‘Tax Collected at Source”

– The TDS rates for all non-salaried payment to residents, and tax collected at source rate will be reduced by 25 % of the specified rates for the remaining period of FY 20-21.

– This will provided liquidity to the tune of Rs 50,000 Crore.

> Following Payment shall be eligible for this reduced rate of TDS which are as : –

– Payment to contract (Sec 194C),

– Professional fees (Sec 194J),

– Payment on Interest,

– Payment on Rent,

– Payment of Dividend,

– Payment of Commission,

– Payment of Brokerage,

> Following due date for Assessment Year 2020-21 have been extended: –

Particulars Existing Date Revised Date
All Income Tax Returns (Non Corporate Assessee  or Corporate Assessee) 31st July, 2020 or

30th September, 2020

30th November, 2020
Tax audit 30th September, 2020 31st  October 2020
The date for making payment without additional amount under the “Vivad Se Vishwas” scheme 30th June 2020 31st  December, 2020

Source PIB Delhi dated 13.05.2020

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