36 KEY POINTS OF FM Sitharaman Press Conference on ‘Mission Atmanirbhar Bharat’ held on 13 MAY 2020-Easier loans for MSMEs; income tax return deadline extended; lifeline for discoms
India is in the 50th day of its nationwide lockdown imposed in the month of March by Prime Minister Narendra Modi to battle Covid-19 spread in India. PM Modi addressed the nation on Covid-19 crisis and the ongoing lockdown situation, five days before the termination date of Lockdown 3.0. PM Modi announced an extension of lockdown and said that the details regarding the same will follow soon. This is Prime Minister’s fifth special address to the nation in the last two months.
Sitharaman’s press conference comes a day after Prime Minister Narendra Modi announced USD 265 billion fiscal stimulus to deal with COVID-19 situation in the country. The package is the second largest in Asia after Japan.
Atmanirbhar (self-reliant) India does not mean India is to be an isolationist country: Finance Minister Nirmala Sitharaman
1. Plan to make India confident in its ability : FM Sitharaman
Addressing a press conference to unveil the plan that was outlined by the Prime Minister yesterday, Finance Minister Nirmala Sitharaman said, ‘The plan is to make India confident in its abilities not isolate India from the world. We have the ability to contribute to the world as we have seen recently.” She added that the integration to global value chain is a part of the plan laid by the Prime Minister.
2. FM Sitharaman recalls flagship schemes
FM Sitharaman highlights Direct Benefit Transfer based on Jan Dhan Yojana account; PM Awas Yojana; Ujjwala Yojana; Swacch Bharat Abhiyan; PM Fasal Bima Yojana; PM Kisan Yojana, etc schemes to recall the success of Modi government.
3. Focus on ease of doing business in India
Focus is on ease of doing business, ease of compliance, and regulation the finance minister said. She added that India will look to build brands and take them to the global level. She clarified that India will not become isolationist.
4. Finance Minister stresses on the aim of the government to help various sectors
“After the July budget we met several times and we made sure to address the needs of various sectors that were felt should be addressed,” finance Minister Nirmala Sitharaman said. She added that the aim of the government has been to address issues of various sectors since it has come to power.
5. Stimulus package as announced by the Prime Minister to come in various tranches
“I shall come out beginning today to come out and discuss various tranches that will be a part of the plan laid out by the Prime Minister,” the Finance Minister said, making it clear that the stimulus package will come in various parts for various indutries.
6. Collateral free loans for MSMEs announced by the Finance Minister
Collateral-free automatic loan to be up to Rs 3 lakh crore will be given out to the MSMEs with a time frame of 4 years with a 12 moratorium. 45 lakh MSMEs are to benefit from this scheme. Eligible must have turnover of Rs 100 crore.
7. Second scheme for the MSMEs that are stressed
Under the schemes government will facilitate provisions of Rs 20,000 crore as subordinate debt. Around 2 lakh MSMEs are likely to benefit from this scheme of the government. Those MSMEs that are stressed will be eligible.
8. Equity infusion of Rs 50,000 crore for MSMEs through fund of funds
In the third scheme for the MSME sector, the finance minister said that a fund of funds will be set up for the MSMEs that are viable. The fund of funds will have a corpus of Rs 10,000 crore. The scheme as the finance minister said will help the MSME increase its size.
9. Definitions of MSMEs changed and investment revised upwards
Classification – Manufacturing and Servies
Micro – investment less than Rs 1 crore and turnover less than Rs 5 crore
Small – Investment less than Rs 10 crore and turnover of less than Rs 50 crore
Medium – Investment less than Rs 20 crore and turnover less than Rs 100 crore
10. Finance Miinister leaves space for amendment to laws pertaining to MSMEs
With the change in definition for MSMEs the finance minister has also raised the investment limit for these. Along with this, the finance minister has left space for amendments to the law in this context that will be brought. The finance minister has addressed a long-pending demand for revision with this.
11. Global tenders to be disallowed upto Rs 200 crores
Indian MSMEs and other companies have often faced unfair competition from foreign companies
Global tenders will be disallowed in government procurement tenders upto Rs 200 cr
Necessary amendments to be brought about in General Financial Rules
12. All receivables of MSMEs will be cleared by government in 45 days
E-Market linkage for SMEs since trade fairs and exhibitions may not be held post coronavirus in place of trade fairs, all receivables to be cleared within next 45 days, the finance minister Nirmala Sitharaman said.
13. Rs 2500 crore EPF support fr business and workers for three more months
To ease financial stress as businesses get back to work, Government decides to continue EPF support for business & workers for 3 more months providing a liquidity relief of Rs 2,500 crores: Finance Minister Nirmala Sitharaman. The move is expected to help 3.67 establishments or 72 lakh employees with a liquidity relief of Rs 2500 crore.
14. EPF contribution reduced for business and workers for 3 months – Rs 6750 cr liquidity support
Statutory PF contribution of both employee and employer will be reduced to 10% each from existing 12% for all establishments covered by EPFO for next 3 months CPSEs and State PSUs will however continue to contribute 12% as employer contributions.
This scheme will be applicable for workers who are not eligible for 14% EPF support under PM Garib Kalyan Package. This will provied relief to about 6.5 lakh estabilishments covered under EPFO and about 4.3 cr suchemployees Will provide liquidity of Rs 6750 cr to employers and employees over 3 months
15. Rs 30,000 crore special liquidity scheme for NBFCs, MFIs and HFCs
The government launches a Rs 30,000 crore Special Liquidity Scheme for non-banking financial companies, microfinance companies, housing finance companies. Under this scheme investment will be made in both primary and secondary market transations in investment grade debt paper for NBFCs, HFCs and MFIs.Securities will be fully guaranteed by the government.
16. Rs 45,000 crore partial credit guarantee scheme for NBFCs
The government announces Rs 45,000 crore liquidity infusion through a Partial Credit Guarantee Scheme 2.0 for NBFCs: FM Nirmala Sitharaman
17. Rs 90,000 crore liquidity injection for DISCOMs
To give a fillip to DISCOMs with plummeting revenue and facing an unprecedented cash flow problem, Government has announced Rs 90,000 Crore as Liquidity Injection for DISCOMs. With demand reduction, DISCOMs are facing an unprecedented cash flow problem.
18. Central agencies will provide an extension of up to 6 months to contractors
In what can be called a major relief to contractors, all Central agencies will provide an extension of up to 6 months, without cost to contractor, to obligations like completion of work covering construction and goods and services contracts. Government agencies to partially release bank guarantees, to the extent contacts are partially completed to ease cash flow.
19. Extension of registration and completion date of real estate projects under RERA
The Ministry of housing and urban affairs will advise States/UTs and their Regulatory Authorities to extend the registration and completion date suo-moto by 6 months for all registered projects expiring on or after 25th March, 2020 without individual applications.
20. FM Sitharaman: Rs 52,606 crore transferred to 41 crore Jan Dhan account holder
Rs 52,606 crore transferred to 41 crore Jan Dhan account holders, Rs 18,000 crore grain transfers; Ujjwala, divyang and old age also benefited, says FM Nirmala Sitharaman.
21. FM Sitharaman lists business reforms in ‘Mission Atmanirbhar Bharat’
FM lists business reforms: public sector bank clean up, recap, FDI liberalisation, Ease of Doing, IBC, GST, and NHAI TOT, power sector reforms, privatisation of airports, cleaning up of coal mining sectors.
22. Dates extended
23. All pending refunds to charitable trusts, non-corporate business, LLPs and co-operatives will be processed immediately
24. Extension of Registration & Completion Date of Real Estate Projects Under RERA
– Ministry of housing and urban affairs will issue advisories where Covid-19 can be treated as an Act of God
– Extend the registration and completion sou moto by 6 months for all registered projects expiring on or after 25 March, 2020
– Issue fresh project registration certificates automatically with revised timelines
– These measures will de-stress real estate developers and ensure completion of projects
25. For contractors
Relief to Contractors | In relief to contractors, the finance ministry announces extension of upto 6 months to be provided by all central agencies like Railways, Ministry of Road Transport and Highways, Central Public Works Dept. This will cover construction work and goods and services contracts, completion of works and intermediate milestones, and also concessional period in PPP contracts. To facilitate greater liquidity, government agencies will partially release bank guarantees to the extent of the completed contract so that cash flow improves.
26. For cash-desperate discoms Rs 90K Cr Liquidity Injection for DISCOMs
– Unprecedented cash flow problem accentuated by demand reduction
– DISCOM payables to power generation and transmission companies is currently close to Rs 94,000 cr
– PFS/REC to infuse liquidity of Rs 90,000 to DISCOMs against receivables
– Loans to be given against state guarantees for exclusive purpose of discharging liabilities of Discoms to Gencos
27. For NBFCs Rs 30,000 Cr Special Liquidity Scheme for NBFCs/HFCs/MFIs
– Govt will launch a Rs 30,000 crore special liquidity scheme
– Under this investment will be made in both primary and secondary market transactions in investment grade debt paper of NBFCs/HFCs/MFIs
– Will supplement RBI/govt measures to augment liquidity
– Securities will be fully guaranteed by govt of India
– This will provide liquidity support
28. To provide more take-home salaries and also increase cash-in-hand for employers
29. Collateral-free automatic loan for MSMEs
30. All pending refunds to charitable trusts and non-corporate business & professions shall be issued immediately, says FM.
31. TDS and TCS rates will be deducted by 25% for payment on all contracts for FY2020-21 , says FM.
32. Ministry of Housing and Urban Development to issue directions to regulatory authorities for treating “COVID-19” period as “Force Majuere” for real estate projects: FM Nirmala Sitharaman.
33. All govt agencies such as Railways, Highways, CPWD, etc will give up to 6 months extension to contractors to comply with contract conditions. Govt agencies will partially release bank guarantees to the extent of completion of contracts, says FM.
34. To ease financial stress as businesses get back to work, Government decides to continue EPF support for business & workers for 3 more months providing a liquidity relief of Rs 2,500 crores: FM Nirmala Sitharaman.
35. Rs 52,606 crore have been transferred to 41 crore JanDhan account holders since previous set of announcements in late March, says FM Nirmala Sitharaman.
36. Collateral-free Automatic Loan for MSMEs | The finance ministry announces 3 lakh crore collateral-free automatic loan for MSMEs.
Source: Indian Express/Financial Express/Press Release/Other Newspaper
Disclaimer: The Article is based on the Relevant Provisions and as per the information existing at the time of the preparation. In no event I shall be liable for any direct and indirect result from this Article. This is only a knowledge sharing initiative.
The Author – CS Deepak Seth (Associate Partner at Helpinghands Professionals LLP) and can be reached at email@example.com or 9910248911.