India will offer bank loans amounting to Rs 3 trillion rupees ($39.85 billion) to small businesses, Finance Minister Nirmala Sitharaman said on Wednesday, as part of measures to combat the damage caused by the coronavirus outbreak.
Under the plan, the government will provide a credit guarantee to businesses to avail collateral-free loans from banks, aiming to help 4.5 million businesses by October 2020, she said.
The allocation is part of a Rs 20 trillion rupee ($266 billion) fiscal and monetary package to support the economy that has been battered by a weeks-long lockdown.
More than one-third of Indian households may run out of resources in another week and face distress without assistance after that, says a study based on data from the Centre for Monitoring Indian Economy household survey.
The study on the impact of the lockdown on household income released on Tuesday also revealed that nearly 84% of households have suffered a decrease in monthly income, and that more than one-fourth of the country’s working age population is unemployed.
“Across India, 34% of all households report being able to survive for no more than one week without additional assistance,” said the study co-authored by CMIE chief economist Kaushik Krishnan, highlighting an urgent need for support to households at the lower end of the income spectrum.
Another survey has shown half of over 5,000 households surveyed in rural areas of 12 states have been eating fewer meals during the coronavirus lockdown, according to a survey.While 50 per cent of households in rural India have reduced the number of meals ever since the lockdown was imposed as part of immediate adjustment for food security, about 68 per cent of the households reduced the number of items in their meals.
"The package is essentially to spur growth and help build a self-reliant India This whole initiative is called 'Atma-Nirbhar Bharat Abhiyan' (self-reliant India campaign),” said Sitharaman.
The initiative rests on five important pillars: economy, infra, tech-driven system, demography and demand. In this mission, our focus will be on land, labour, liquidity and law.The intention is to build brands: picking local brands and taking it global. The idea is not to become self-exclusionist but to contribute to the world.
Definition of MSMEs has been revised. Investment limit that defined an MSME revised upwards to Rs 1 crore from Rs 25 lakh. A company can be MSME if the turnover is up to Rs 5 crore now.
Measures for Employees Provident Fund (EPF)
-A liquidity relief is being given for all EPF establishments. Government support in the form of 12% employer and 12% employee contribution extended for another three months (June, July and August).Government has reduced statutory EPF contribution of private sector employers and employees from current mandated 12% to 10% for next 3 months. However, for government PSUs it will remain 12% but PSU employees can pay 10%. This was one of the measures announced by the finance minister Nirmala Sitharaman at a press conference today. This will reduce the total contribution to an employee’s EPF corpus.
Lohit Bhatia, president, Workforce Management, Quess Corp,said, “We feel this is a good move by the Government to infuse liquidity into the employers at 2% and similar enhanced nett take home of the employees to the same 2% impact, this being a Non cash , non-subsidy component announced is basically a liquidity infusion for the citizens and corporates , the Government should extend the same for the entire FY rather than curtailing to only 3 months.Staffing industry had also made a similar representation and we are glad that the government is in listening mode.”
From tomorrow, till March 31, 2021, TDS and TCS rates reduced by 25%.This will release Rs 50,000 cr in the hands of people
Dates extended for direct taxes
-Vivaad se Vishvas: Whole scheme extended till December 31, 2020,
-Due date for all I-T returns for 2019-20 extended to Nov 30, 2020,
-Date of asssessments getting barred as of March 31, 2021, are getting extended till September 30, 2021,
-All pending refunds to charitable trusts, non-corporate businesses will be given immediately,
-Date of assessments getting barred as on September 30, 2020, extended to December 31, 2020
Measures for real estate
-The urban development ministry to issue advisory to states and UTs so that regulators consider the Covid-19 period an 'act of god'
-They will be able to extend all registered projects by up to 6 months
-Using the force majeure clause suo motu they can extend registrations and completion dates if these were falling after March 25, 2020
-Timelines under RERA to be extended
Measures for power discoms
-One-time emergency liquidity injection,
-Rs 90,000 crore infusion in discoms by PFC and REC against their receivables,
-State to issue guarantees,
-Discoms to pay the gencos from the funds so generated,
All those receiving money should pass on the benefits to consumers
Measures for contractors
-All central govt agencies (railways, highways, PWD, etc) to give up to six-month extension to contractors
-Extensions to cover goods and construction contracts
-Concessional periods to also be extended by up to 6 months
-Govt agencies to partially release bank guarantees to the extent of the partially complete contracts