Nirmala unveils India’s Rs 20 lakh crore package
On Wednesday, Union Finance Minister Nirmala Sitharaman unveiled the first set of measures of the financial package worth Rs.20 lakh crore. She stated that PM Narendra Modi laid down the vision of Atmanirbhar India (self-reliant India) after deep consultation with several sections of the society. She also mentioned that the focus of the package is on the factors of production- land, labour, liquidity and others. Moreover, she added that the intention was to take the local brands and build them to a global level. Recalling the Direct Benefit Transfer reforms, PM Awaz Yojana, Ujjwala Yojana, Swachh Bharat Yojana, Ayushmann Bharat scheme, PM Fasal Bima Yojana, PM Kisan Yojana, PSB clean-up, GST reforms and power sector reforms undertaken in the Modi government’s tenure so far, Sitharaman observed that they were the foundation of self-reliant India.
Here are all the measures announced by the Finance Minister:
1. Rs. 3 lakh crore collateral-free automatic loans for business, including MSME-Emergency credit line extended to businesses including MSMEs from banks and NBFCs up to 20% of outstanding credit as on February 29,2020. This is set to benefit 45 lakh units.
2. Rs. 20,000 crore subordinate debt for MSMEs- Centre will facilitate the provision of Rs.20,000 crore as subordinate debt for stressed MSMEs. 2 lakh MSMEs are likely to benefit.
3. Rs. 50,000 crore equity infusion through MSME Fund of Funds- As MSMEs face severe shortage of equity, the Fund of Funds with a corpus of Rs.10,000 crore shall be set up. This shall provide equity funding for MSMEs with growth potential and encourage them to get listed on the main board of Stock Exchanges.
4. The new definition of MSMEs- The definition of MSMEs has been revised whereby investment limit shall be revised upwards. Also, an additional criteria of turnover is being introduced. Necessary amendments to the laws will be brought about.
5. Global tenders to be disallowed up to Rs. 200 crore- Global tenders shall be prohibited in government procurement tenders up to Rs.200 crore as Indian companies have faced unfair competition from foreign companies. This is a crucial step towards a self-reliant India.
6. Other interventions for MSMEs- The Union government and Central Public Sector Enterprises will honour every MSME receivable in the next 45 days. E-market linkage shall be promoted as a replacement of trade fairs.
7. Rs. 2500 crore EPF support for business and workers for 3 more months- The payment of 12% of employer and 12% of employee contributions made into the EPF accounts of eligible establishments shall continue for the months of June, July and August. Overall, liquidity relief of Rs.2500 crore will be provided to 72.22 lakh employees.
