10 Key Takeaways | FM Nirmala Sitharaman Unveils First Part Of Rs 20 Lakh Cr Economic Stimulus

Finance Minister Nirmala Sitharaman on Wednesday announced 15 measures under 'Atmanirbhar Bharat Abhiyan' economic package worth Rs 20 Lakh Cr to revive economy post Coronavirus pandemic.

Nirmala Sitharaman speaks during a news conference to unveiled a package worth Rs 20 lakh crores to stimulate Indi's economy. (Image: AFP)

New Delhi: First in the series of press briefings over Prime Minister Narendra Modi's mega 'Atmanirbhar Bharat Abhiyan', Finance Minister Nirmala Sitharam on Wednesday unveiled the details of the special economic package worth Rs 20 lakh crore. Nirmala Sitharaman, the Minister of Finance and Corporate Affairs of India, began her speech saying that "PM Modi laid out a comprehensive vision, and that vision was laid out after wide consultations with several sections of the society." Addressing the media, Finance Minister said that PM Modi's dream for 'Atmanirbhar (self-reliant) India' does not mean India is to be an isolationist country. "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." In a major initiative, the government announced 15 measures to push the economy towards the betterment of the poor. Of the 15, 6 deal with MSMEs, 2 relating to EPF, 2 relating to NBFCs, housing finance corporations and MFIs, 1 on discoms, 1 on contractors, 1 on real estate, and 3 on tax measures. Here are the major announcements made by Finance Minister Nirmala Sitharaman: 1. In a major initiative, Finance Minister announced Rs 3 lakh crores collateral-free automatic loans for businesses, including SMEs. Going by the details announced by the Minister, borrowers with up Rs 25 Crore outstanding and Rs 100 Crore turnover will be eligible. These have 4 year tenor, which will be valid up to October 31st, 2020. 2. For stressed MSMEs, Centre announced subordinate debt provision of Rs 20,000 cr for 2 lakh MSMEs. It will benefit those which are NPAs or stressed MSMEs. 3. For MSMEs needing handholding, Government announced Rs 50,000 crore Fund of Funds through mother fund - daughter fund to expand their capacity and to get listed on markets which they choose. 4. Another measure listed for MSMEs stated that global tenders will be disallowed in government procurement for tenders up to ₹ 200 crore. This will address unfair competition being faced by MSMEs, and enable them to participate actively in government purchases. 5. In another measure for MSMEs, government announced that seamless e-market linkages across the board will be provided to MSMEs, considering their inability to participate in trade fairs due to COVID-19. 6. Speaking on measures taken for employees, Sitharaman said that a liquidity relief of ₹2,500 crore EPF support is being given to all EPF establishments. EPF contribution will be paid by Government of India for another 3 months. This will benefit more than 72 lakh employees. 7. In another measure, Sitharaman announced that the Central government has decided to slash the rate of mandatory PF contribution for both employees and employers by two per cent from 12 per cent to 10 per cent. She said that initiative is aimed to provide more liquidity to employers and employees and is likely to provide additional liquidity of Rs 6,750 crore. 8. To help, NBFCs/HFCs/MFIs, Government launched a Rs 30,000 crore Special Liquidity Scheme. 9. For Discoms, Ministry announced a one-time emergency liquidity injection of Rs 90,000 crore against all their receivables. 10. Centre also announced an extension of registration and completion date of real estate projects under RERA. Along with these initiatives the Centre also announced a reduction of 25% of existing rates of Tax Deducted at Source (TDS) and Tax Collection at Sources (TCS) from May 13 till March 31, 2021. This will release Rs 50,000 crores. In the end, the government announced extension of due date of all IT Return filings - July 31 to November 30. Sitharaman's brief came a day after Prime Minister Narendra Modi on Tuesday evening announced a special economic package worth Rs 20 lakh crore to mitigate the economic damage caused by the novel Coronavirus. The package, which is almost 10 per cent of India's GDP, includes Reserve Bank of India (RBI)'s assistance and a Rs 1.74 lakh crore fund announced earlier. The package emphasizes on land, labour, liquidity, laws and will also focus on the farmers and the labourers who support the nation during the times of crisis.