The bulletins, described by Sitharaman as the primary of a collection of tranches to be unveiled over the subsequent few days, is part of Rs 20 lakh crore fiscal and financial package deal introduced by PM Modi on Tuesday to assist the financial system.
- Information18.com New Delhi
- Final Up to date: Might 14, 2020, 8:40 AM IST
Finance minister Nirmala Sitharaman on Wednesday introduced the primary installment of a mega reduction package deal aimed toward reviving the financial system with 15 measures and prolonged assured credit score for small and medium companies, non-financial banking firms and energy distribution firms (discoms).
The bulletins, described by Sitharaman as the primary of a collection of tranches to be unveiled over the subsequent few days, is part of Rs 20 lakh crore fiscal and financial package deal introduced by Prime Minister Narendra Modi on Tuesday to assist the financial system, which has been devastated by a weeks-long lockdown to curb the unfold of coronavirus.
Sitharaman mentioned the federal government will present Rs three lakh crore value of collateral free- automated loans for companies, together with SMEs, a transfer that can assist 45 lakh companies. She additionally mentioned the federal government will present Rs 90,000 crore for energy distribution firms by way of state-run energy finance firms.
Rs 30,000 crore particular liquidity scheme has additionally been launched for NBFCs beneath which investments can be made in each main and secondary market transactions in investment-grade debt papers of those establishments. These securities can be absolutely assured by the federal government.
Sitharaman mentioned the subsequent wave of reforms with self-reliance because the guideline will deal with land, labour, liquidity and legal guidelines. “Primarily, that is to spur development and to construct a self-reliant India. That’s the reason this initiative is named ‘Atmanirbhar Bharat Abhiyan’,” she mentioned.
The finance Minister’s bulletins additionally aimed to enhancing the sagging morale of India’s workforce, dealing with the brunt of a slowing financial system and muted company earnings, by rising take residence pay quickly by slicing EPF contribution from 12 to 10 per cent for the subsequent three months. The due date for revenue tax returns for 2019-20 has additionally been pushed again.
Listed below are the main points of what the package deal has for various sectors:
Aid for MSMEs
The finance minister introduced Rs three lakh crore collateral free automated mortgage for companies, together with MSMEs. The mortgage may have a 4 12 months tenure and can supply a 12-month moratorium on curiosity funds.
Sitharaman mentioned Rs 20,000 crore subordinate debt can be supplied for burdened MSMEs, which might profit two lakh companies. A Rs 50,000 crore fund of funds for MSME is being created, which is able to infuse fairness in MSMEs with development potentials.
The definition of MSMEs has been modified to permit models with funding as much as Rs 1 crore to be referred to as micro models as an alternative of Rs 25 lakh at current. Equally, models with a turnover as much as Rs 5 crore will now be categorised as micro models, with a turnover based mostly standards being launched to outline small companies. To assist MSMEs compete in authorities tenders, world tenders can be banned for presidency procurement as much as Rs 200 crore.
Rs 30,000 crore assist for NBFCs, HFCs, MFIs
The finance minister introduced a Rs 30,000 crore particular liquidity scheme for non-banking monetary establishments (NBFCs). A Rs 45,000 crore partial credit score assure scheme 2.zero was additionally unveiled for NBFCs, housing finance firms (HFCs), and microfinance establishments (MFIs) with low credit standing to assist them prolong loans to people and MSMEs.
25% minimize in TDS/TCS fee
The federal government slashed the tax deducted at supply (TDS) and tax collected at supply (TCS) charges for non-salary funds to residents by 25 per cent. Nevertheless, Sitharaman clarified that the identical “shall additionally apply to all funds for contracts, curiosity, hire, dividend, fee or brokerage.” The discount, she mentioned, would put almost Rs 50,000 crore into the palms of people that would have in any other case paid it as TDS.
Deadline to file ITRs prolonged
In a reduction to taxpayers, the federal government prolonged the deadline for submitting of all revenue tax returns for FY20 until November 30. The direct tax dispute decision — Vivad Se Vishwas scheme – too has been prolonged by six months until December 31.
Sitharaman mentioned the Revenue Tax Division will fast-track processing of pending refunds to charitable trusts, restricted legal responsibility partnerships (LLPs), non-corporate companies, proprietorship companies, amongst others.
The federal government introduced a Rs 90,000 crore liquidity infusion in electrical energy distribution firms to assist them overcome the present monetary stress. This quantity will assist in clearing the excellent dues of discoms by state owned monetary establishments. State-owned Energy Finance Company (PFC) and Rural Electrification Company (REC) will infuse the liquidity by elevating the ₹90,000 crore from the market in opposition to the receivables of discoms. The state governments will present a assure.
The finance minister prolonged by three months the federal government assist to firms with lower than 100 staff to satisfy retirement fund obligations. For all firms, the statutory obligation to pay 12 % of primary wage as employer’s share to worker provident fund (EPF) contribution has been lowered to 10 % to spice up their liquidity.
Sops for contractors
In a reduction to contractors impacted by the COVID-19 pandemic, they’ll now obtain as much as six months extension for completion of obligations beneath highways, railways and different contracts. “The extension of as much as six months with out price to contractor is to be supplied by all central businesses like Railways, Ministry of Street Transport & Highways and Central Public Works Division,” Sitharaman mentioned.