Honourable Prime Minister Narendra Modi in his recent public address announced the Aatmanirbhar Bharat Abhiyan economic package that is aimed at boosting the national economy by infusing liquidity and promoting local manufacturing. Finance Minister Nirmala Sitharaman discussed the first instalment of the `20 lakh crore package with a focus on the MSME sector.
Collateral-free loan of `3 lakh crores for MSMEs will aid 45 lakh MSME units so that they can resume operations and protect jobs.
Subordinate debt provision of `20,000 crores will benefit 2 lakh MSMEs that are NPAs or stressed assets.
Under the new definition of MSMEs (Micro units with investment till `1 crore and turnover up to `5 crores; Small units with investment till `10 crores and turnover up to `50 crores; and Medium units with investment till `20 crores and turnover up to `100 crores), MSMEs can work on expansion without losing benefits. There will also be no distinction between manufacturing and service sector MSMEs.
Equity of `50,000 crore will be infused through Mother fund-Daughter fund for MSMEs that are viable but need aid. A fund of funds with a corpus of `10,000 crore will be set up to help such MSMEs increase capacity and be listed on markets if they choose.
E-market linkages will be provided across the board in the absence of non-participation in trade fairs due to COVID-19. The government of India and PSUs will clear all receivables in the next 45 days.
To infuse `6,750 crore liquidity into organisations, the statutory EPF contribution for all organisations and their employees covered by EPFO has been brought down to 10 percent from the earlier 12 percent. This is not applicable to government organisations.
Up to 6 months extension (without costs to contractor) will be provided by all Central Government Agencies like Railways, Ministry of Road Transport & Highways, and Central Public Works Dept.
Tax Deducted at Source (TDS) and Tax Collection at Sources (TCS) will be reduced by 25 percent of existing rates till 31st March 2021, which will release `50,000 crores.
Due date of all Income Tax Return filings is extended from 31st July to 30th November, and Vivaad se Vishwas scheme has been extended till 31st December 2020. Date of assessments getting barred as on 30th September 2020 is extended to 31st December 2020, and date of assessments getting barred as on March 31, 2021 is extended to 30th September 2021.
As Indian MSMEs and other companies have often faced unfair competition from foreign players, global tenders will be disallowed in government procurement tenders up to `200 crore.
