The Prime Minister in his speech dated 12th May 2020 stressed on his agenda to stimulate growth and to build a self-reliant India. The whole initiative is called Atma Nirbhar Bharat Abhiyaan (Self Reliant India Mission).
These initiatives would be based on the below 5 pillars:
- Tech-driven systems
The focus would be on factors of productions- Land, Labor, Liquidity and Law and to address ease of doing business and ease of compliance. The idea would be to make local brands move into being global brands and to integrate global value chain with the Indian brands.
To this effect, the Finance minister (FM) Nirmala Sitharaman, came out on 13th May with the following first part of her series of measures.
Important points of the Press conference of Honorable FM:
👉 Six major steps for MSME (Micro, Small and Medium Enterprises)
- Collateral Free Automatic Loan to MSME. No guarantee required. Period 4 Years. No principal repayment for 1 year.
- Stressed MSME: Subordinated Debt 20,000 crore
- MSME doing viable business: 50,000 cr. equity infusion for expansion
- Definition of MSME changed:
- Micro: Limit revised upward Investment up to 1 cr. or Turnover up to 5 cr.
- Small: Limit revised upward Investment up to 10 cr. or Turnover up to 50 cr.
- Medium: Limit revised upward Investment up to 20 cr. or Turnover up to 100 cr.
- No difference in the manufacturing and service sector for Micro Enterprises
- Government Tenders: Global tenders will be disallowed up to 200 cr.
- E-market linkage for MSME. Within the next 45 days, all payments will be made to MSME.
👉 EPF (Employees Provident Fund): For June, July and August will be paid by the Government (72,22,000 employees will be benefitted). Total of Rs. 2500 benefit crore provided the industry/company has a salary of 90% of staff, below Rs. 15,000 and the number of employees is less than 100.
👉 EPF (Employees Provident Fund): Statutory PF deposit limit reduced from 12% to 10% for the next 3 months. (6,750 cr.) (except CG and PSU’s)
👉NBFC (A Non-Banking Financial Company), HFC (Home Finance Company) & MFI (Micro Finance Institution); Rs. 30,000 cr. Special liquidity scheme
👉Partial credit guarantee scheme for NBFC: Rs. 45,000 cr scheme. Govt. of India will be the guarantor. 20% will be borne by GOI.
👉 Discom: Liquidity crisis. Rs. 90,000 cr. infused for improving Liquidity crises. This amount will be paid by PFC and REC.
👉 Contractors: Extension up to 6 months to comply with contract conditions.
👉 Real Estate: COVID 19, an event of ‘Force Majeure’. Registration and Completion extended for 6 months for all projects expiring o or after 25.03.2020
👉 Direct tax:
- Due dates of IT return for FY 2019-20
- Earlier 31.07.2020 & 31.10.2020 Now 30.11.2020
- Tax Audit due date: Earlier 30.09.2020 Now 31.10.2020
- Pending refunds of charitable trusts, non-corporate business, proprietorship, partnership, LLP and society will be issued immediately.
- TDS rates reduced by 25% of existing rates from May 14, 2020, to 31.03.2021 (Non-salaried to residents and TCS). Revised section-wise TDS rates are attached below.
Reduction in TDS Rates
Date of assessment extended
- From those barring on 30.09.2020 to 31.12.2020
- From those barring on 31.12.2021 to 30.09.2021
- Period of Vivad se Vishwas Scheme for Making payment without additional amount will be extended to 31st December 2020.
To download the PPT released by the Finance Minister: click here