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Nirmala Sitharaman Speech Today on the government economic package of Rs 20 lakh crore: key points | India Business News

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NEW DELHI: Finance Minister Nirmala Sitharaman unveiled on Wednesday the first installment of the mega economic stimulus package aimed at raising the economy hit by the ongoing national blockade to combat the spread of the new coronavirus.

In a major push to revive the economy, Prime Minister Modi announced a rupee package of Rs 20 lakh while addressing the nation on the coronavirus situation. The package combines recent government announcements about support for key sectors as well as measures implemented by the Reserve Bank of India (RBI).

These are the key points of Sitharaman’s leadership:


* With effect from May 14 to March 31, 2021, TDS / TCS (tax deducted at source / tax collected at source) has been reduced by 25% of the existing rate and applies to all payments . It will release Rs 50 billion rupees into people’s hands instead of paying them as taxes.

Nirmala Sitharaman Speech Today on the government economic package of Rs 20 lakh crore: key points | India Business News

Taxpayer Relief – Extended ITR Filing Date, Reduced EPF Contribution

In great relief to taxpayers, Finance Minister Nirmala Sitharaman announced key reforms to the tax structure on Wednesday consisting of an extension of the due date for filing tax returns, reduction in the TDS / TCS rate for non-salary payments, EPF support for businesses and workers, rapid processing of outstanding funds and payment of the Vivad se Vishwas scheme.

* The due date of all income tax returns for the 2019-20 fiscal year will run from July 31, 2020 and October 31, 2020 to November 30, 2020 and the tax audit from September 30 from 2020 to October 31, 2020.

Nirmala Sitharaman Speech Today on the government economic package of Rs 20 lakh crore: key points | India Business News

TDS and TCS rates for non-salaried payments decreased by 25% through March 31, 2021

Finance Minister Nirmala Sitharaman announced a 25% reduction in the TDS (tax deducted at source) and TCS (tax collected at source) for the current fiscal year on Wednesday. This will release liquidity worth Rs 50,000 cr. The reduced rates will be applicable for all types of transactions, including contract payment, professional fees, interest, rentals, etc.

* The government announces unsecured loans of Rs 3 lakh crore for MSMEs, which have a 4-year tenure and a 12-month moratorium. These loans will be available until October 31, 2020 and will have a 100% credit guarantee. This will help 45 lakh units to resume activity and safeguard the work.

Nirmala Sitharaman Speech Today on the government economic package of Rs 20 lakh crore: key points | India Business News

The Center announces an automatic unsecured loan of Rs 3 lakh crore for MSMEs

Nirmala Sitharaman announced on Wednesday an unsecured automatic loan of Rs 3 lakh crore for companies, including MSMEs. This will benefit 45 lakh small businesses, he said in detailing parts of the Rs 20 lakh crore economic stimulus package. The loan will have a 4-year tenure and a 12-month moratorium. A subordinated debt of Rs 20K cr will be provided for stressed MSMEs.

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* To provide stressed MSMEs with capital support, the government will facilitate the provision of Rs.

* The definition of MSMEs has been modified so that they do not have to worry about growing in size and still take advantage of the benefits.

Nirmala Sitharaman Speech Today on the government economic package of Rs 20 lakh crore: key points | India Business News

Government changes definition of MSMEs, reviews investment limit

According to the revised definition of MSMEs, any company with an investment of up to Rs 1 crore and a turnover of less than Rs 5 crore will be classified as “Micro”. A company with an investment of up to Rs 10 million and a turnover of up to Rs 50 million will be classified as “Small” and a company with an investment of up to Rs 20 million and a turnover of less than Rs 100 million will be will classify as “Medium”.

* The investment limit defined by a MSMEs has been revised upwards to Rs 1 crore compared to Rs 25 lakh earlier.

* For MSMEs that need retention, a framework of crore funds of Rs 50,000 is being created through the mother-child fund, to expand their capacity and list in the markets they choose.

* Global tenders will not be allowed in public procurement for tenders of up to Rs 200 million. This will make India self-sufficient, and then it can serve ‘Make in India’.

* E-market links will be provided without interruption in all areas to MSMEs, taking into account their inability to participate in trade fairs due to COVID-19. All pending payments to MSMEs, from the central government. bodies and power supply units to be completed within the next 45 days.

* EPF support for companies and workers has been extended for the next 3 months, providing liquidity relief of Rs 2.5 billion. PF’s legal contribution for those who were not previously covered is decreasing from 10% to 10%. The reduction is not for the central government.

* Period of the Vivad se Vishwas scheme to make payments without an additional amount extended until December 31, 2020.

* A special liquidity scheme of Rs 30,000 crore for NBFC / HFC / MFI has been launched. Investments in primary and secondary markets, to buy even investment grade debt papers. This will facilitate the flow of credit.

* A liquidity infusion of Rs 90,000 crore was made for all energy distribution companies. This will be against accounts receivable and will allow Discoms to pay generation companies. Eventually they will pass on benefits to customers.

* All outstanding refunds to charitable trusts and non-corporate businesses and professions will be issued immediately.

* The government announces a liquidity infusion of Rs 45 billion through a Partial Credit Guarantee Plan 2.0 for NBFC.

* In great relief to contractors, all central agencies will grant an extension of up to 6 months, at no cost to the contractor, to obligations such as completion of work covering construction and contracts for goods and services.

* The Ministry of Housing and Urban Affairs will issue a notice to the states and UTs that allow the invocation of force majeure / measure of the Law of God during the COVID-19 period, for all registered real estate projects that expire from 25 March 2020. This will provide flexibility in contract compliance.

* Essentially, the package is to stimulate growth and improve demand and create a
atmanirbhar (self-sufficient) India.

* PM presented a comprehensive vision, and that vision was presented after extensive consultations with various sectors of society.

* Five pillars of a self-sufficient India are: economy, infrastructure, system, demography and demand.

* The intention is to make local brands and take them globally.

* Self-sufficient India does not require India to be an isolationist country.

Times of India

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