Finance minister eases woes of MSMSEs & NBFCs

Finance minister Nirmala Sitharaman rolled out the first instalment of the rs.20lakh crore package
unveiling a comprehensive for MSMEs & NBFCs to ensure they have adequate liquidity.

SCHEMES -5.94 LAKH CRORES

MSMEs

PF RELIEF FOR BUSINESS WORKERS

NBFCS

POWER DISCOMS

TAXPAYERS

SCHEME AMOUNT WHO FUNDS IMPACT ON BUDGET

cr
Collateral free 300000 BANKS/NBFC  Interest or principal fully guaranteed
automatic loan s by govt.
 No immediate cash outflow
 Cost will depend on guarantee
needed.
Subordinated debt 20000 BANKS Rs.4000 cr as support to CGTMSE
for stressed MSMEs
Fund of funds to 50000 OTHER GOVT. RS.10000cr credit guarantee fund trust for
provide equity for INVESTORS micro and small enterprise
MSMEs
Govt to pay PF for 2500 GOVT -
both
Lower PF contr of 6750 NO FUNDS No allocation needed for the government
10% NEEDED
Spl liquidity scheme 30000 GOVT. Security fully guaranteed by govt
for NBFCs
Partial credit 45000 BANKS No allocation needed
guarantee scheme Cost based on guarantee involved
Liquidity injection 90000 PFC/REC No cost to centre
States to provide guarantee
TDS /TCS rate cut by 50000 NO FUNDS -
25% of existing rate NEEDED

IMPACT:

 Significant relief for MSMEs & NBFCs

 Govt. guarantee will ensure resumption of fund flows
 NBFCs will have direct govt. support
 Credit flow to economy will get a lift.
 Liquidity measures to prevent distress.
 PF support may lead to fewer job losses.
 Most of the package comprises guarantees & liquidity.
 Cost of guarantees will be lag and is usually a small % of total
  Cash component of the package is less than 50000 cr
 Impact on fiscal deficit not significant yet.
 About rs.7 lakh cr stimulus remains.

Essentially its spur to growth and build self-reliant bharat.

5 pillars

 Economy
 Systems
 Demography
 Demand
 Infrastructure

Land /Labour/Liquidity /Law

Intention is to build local brand in to global brand .

 Recalling Steps already Done.(From 2014-2020)

 DBT based reforms

 Micro insurance schemes

 Ujwala Scheme

 Ayshyaman Bharat

 PM kisan beema yojana

 Krishi sanchai yojana

 PSB clean-ups
 PSB recapitalization

 GST Reforms

 Airport Privatisation

 175GW of solar Targets

 IBC

 Coal Sector reforms

 1 .70L cr package already Given

 18000CR pulse distributed.

 56000Cr to DBT accounts

 18000Cr refund of IT was done on war footing @14L taxpayer benefitted

 ⭕RBI gave liquidity Stimulus in addition to above.

 ⭕Today and next few days she will address Fiscal measures

 ⭕Total 15 Measures today out of which 6 Related to Micro Finance sectors

 ▶️Collateral free Automated Loan for MSME up to 3L crores.

  4 years tenure
 Moratorium for 1 year of loan
 For Enterprise from 25CR to 100Cr Turnover
 Rs52606CR in jandhan and free cylinder to them.
 Subordinated Debt for Stressed MSME for 20000Cr .
 Rs50000Cr infusion as equity in MSME
Definition of MSME:
It's been changed in favour of MSME. Change is that investment limit to define
the MSME is changed Upwards. Additional Criteria brought is in Manufacturing
and service is same now.
 Turnover upto 5CR is called Micro Enterprise
 Govt procurement tenders up to 200CR now not on global route
 E-Market linkage will be done and Vyapar melas will be conducted
 All MSME payments to be clear in 45 days
 EPF Liquidity relief for all EPF establishment 12% by employee and 12% by
employer. The benefit will be extended till August 2020 Now 2500CR
liquidity support by GOI 72L employers to be benefittes
EPF
Statutory PF contribution reduces from 12% to 10% For CPSE and state PSU will
be 12% Rs6750CR liquidity relief for next 3 months

 NBSC/MFC/HFC: Rs30000CR special liquidity scheme by buying Debt papers

and fully guaranteed by GOI.
 NBFC: Rs45000 CR partial credit guarantee scheme 2.0

DISCOMS: Facing unprecedented Cash issue For This Rs90000Cr liquidity infusion.
REC and PFC will do it by State issuing Guarantees Discom-Gencos and cycle keep
moving Benefit will be passed to consumer
CONTRACTORS All GOI Enterprise will give up to 6 months extension for contract
completion .This includes Railways,Highways,Ports,Airports .
GOI will release bank guarantees to the extent of work completed to improve the
cash Flow of Contactors

Real Estate: Covid -19 period can be treated as ACT of GOD. Force Majure Clause
for project was registered on or after March 2020.Suo Moto do it for 6 Months
This will distress real estate project .
TAX RELIEF: From tomorrow till March 2021. TDS and TCS Rates will be decreased
by 25% Will Release Rs50000Cr in hands of people
Set of dates extension: All pending Refunds of
Proprietors/Partners/LLP/Charitable trust/Professional/Non corporate companies
will get immediately Due dates of all IT Returns for 2019-2020 extended till Nov
2020 from July 2020

Date of assessment getting barred as on 30th Sept 2020 extended till 31st dec
2020 And those getting March 31st 2021 will be extended till 30th Sept 2021
Vivad see vishwas scheme is getting extended till Sept 2020 without any extra
payments.

However, cautioned that while certain sectors could see some amount of
upswing, an overall market rally is unlikely to happen. “Equity markets are
expected to appreciate the measures and not celebrate it with a big surge due to
two key uncertainties, including mechanism to fund the relief package, and
quantum of immediate outflow from the government coffers”