Nirmala Sitharaman Press Conference: FM Announces Collateral-Free Automatic Loans Worth Rs 3 Lakh Cr For MSMEs

While listing out how the economy will get a boost with the recently announced financial package, Finance Minister Sitharaman said that essentially this is to spurt growth and to build a very self-reliant India.

Finance Minister Nirmala Sitharaman addressing press conference on Rs 20 lakh crores stimulus package.

New Delhi: Finance Minister Nirmala Sitharaman on Wednesday addressed a press conference to rollout the blue charge of Rs 20 lakh crore 'mega economic package' announced by Prime Minister Narendra Modi a day ago. Starting her speech, Sitharaman hailed PM Modi's announcement of stimulus package and said that the Prime Minister laid out a comprehensive vision which was laid out after wide consultations with several sections of the society. While listing out how the economy will get a boost with the recently announced financial package, Finance Minister Sitharaman said that essentially this is to spurt growth and to build a very self-reliant India and that is why this whole initiative is called 'Atmanirbhar Bharat Abhiyan'.

The special #EconomicPackage outlined by PM @narendramodi envisions to spur growth and build a self-reliant India. An #AatmanirbharBharat will have five key pillars - economy, infrastructure, system, demography & demand: FM #NirmalaSitharaman pic.twitter.com/YqnQi9Ukfn

— NITI Aayog (@NITIAayog) May 13, 2020

Sitharaman further praised the direct benefit transfer (DBT) which has enabled directly transfer of money into account in the first phase of stimulus package announcement. The Finance Minister also spoke about government initiatives such as the Ujawala scheme, Awaaz yojana, Ayushman Bharat including several others targeted for boosting rural India. She also mentioned several measures taken to push the economy towards the betterment of the poor.

The Direct Benefit Transfer, Micro insurance schemes, PM Awas Yojana, PM Ujjwala Yojana, @swachhbharat and @AyushmanNHA were all transformative reforms which have benefited the poor in a big way: FM @nsitharaman #AatmanirbharBharat pic.twitter.com/Euglbh9PPe

— BJP (@BJP4India) May 13, 2020

Sitharaman emphasised about public sector clean ups, banks capitalisation, FDI liberalisation, GST impact on MSMEs and other reforms. Finance Minister also made a big announcement of providing Rs 3 lakh crores collateral-free automatic loans for businesses, including SMEs. "In a major initiative, we announce Rs 3 lakh crores collateral-free automatic loans for businesses, including SMEs. Borrowers with up Rs 25Cr outstanding and Rs100 Cr turnover are eligible."

A collateral-free automatic loan is being given to MSMEs, with a facility of ₹ 3 lakh crores

This will enable 45 lakh MSME units to resume business activity and also safeguard jobs - FM #NirmalaSitharaman#AatmaNirbharBharatAbhiyan #EconomicPackage #AatmanirbharBharat pic.twitter.com/rGXBrqI5WD — PIB in Maharashtra 🇮🇳 #MaskYourself 😷 (@PIBMumbai) May 13, 2020

Sitharaman also said that these loans will have a 4 year tenor which will be valid up to October 31, 2020. Borrowers with up Rs 25 crore outstanding and Rs 100 crore turnover will be eligible to avail this loan benefit. "Government to provide stressed MSMEs with equity support; Government will facilitate the provision of Rs. 20,000 Crores as subordinate debt," FM said adding that this will enable 45 lakh MSME units to resume business activity and also safeguard jobs.

✅Investment limit for MSME increased ✅Additional criteria for turnover size ✅Distinction between manufacturing and service MSME removed!

- FM #NirmalaSitharaman, announcing #NewMSMEDefinition LIVE: https://t.co/sjXeXN1eB6 #AatmaNirbharBharatAbhiyan pic.twitter.com/DzbCut2YO3 — PIB in Maharashtra ???????? #MaskYourself ???? (@PIBMumbai) May 13, 2020

"Rs 50,000 crore equity infusion for MSMEs through Fund of Funds to be operated through a Mother Fund and few daughter funds," Sitharaman said. The move is aimed to help expand MSME size as well as capacity. The Bharatiya Janata Party (BJP) leader further said that definition of MSMEs has been revised, investment limit will be revised upwards and additional criteria of turnover is also being introduced. "Global tenders to be disallowed in Government procurement up to Rs 200 crores. This will make self-reliant India, will also then be able to serve 'Make in India'," she noted.

Rs 50,000 cr. Equity infusion for MSMEs through Fund of Funds; to be operated through a Mother Fund and few daughter funds; this will help to expand MSME size as well as capacity. #AtmaNirbharBharatAbhiyan #atmanirbharbharat pic.twitter.com/Y5FMC4TouI

— PIB India #StayHome #StaySafe (@PIB_India) May 13, 2020

The major announcements made by Finance Minister came a day after PM Modi addressed the nation and announced a mega financial stimulus to revive the economy which has been reeling under Coronavirus crisis. PM Modi, during his address, said that the economic package announced was around 10 per cent of Indian GDP.