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Discuss the provisions of major stimulus package announced for MSMEs b...

  Jun 10, 2020

Discuss the provisions of major stimulus package announced for MSMEs by the Central government under the umbrella known as Atmanirbhar Bharat Abhiyan.

  1. Union Finance Minister has announced a ₹3 lakh crore collateral free loan scheme for businesses, especially micro, small and medium enterprises (MSMEs), as part of a ₹20 lakh crore economic stimulus package to deal with the COVID-19 pandemic.
  2. For salaried workers and taxpayers, some relief was provided in the form of an extended deadline for income tax returns for financial year 2019-20, with the due date now pushed to November 30, 2020. 
  3. The rates of tax deduction at source (TDS) and tax collection at source (TCS) have been cut by 25% for the next year.
  4. The statutory provident fund (PF) payments have been reduced from 12% to 10% for both employers and employees for the next three months.
  5. Apart from MSMEs, other stressed business sectors which got attention were non-banking finance companies (NBFCs), power distribution companies, contractors and the real estate industry.
  6. MSMEs will get the bulk of the funding. The ₹3 lakh crore emergency credit line will ensure that 45 lakh units will have access to working capital to resume business activity and safeguard jobs.
  7. A ₹50,000 crore equity infusion is also planned, through an MSME fund of funds with a corpus of ₹10,000 crore.
  8. The definition of an MSME is being expanded to allow for higher investment limits and the introduction of turnover-based criteria. 
  9. In a bid to fulfil the vision of a self-reliant or “atmanirbhar” India, global tenders will not be allowed for government procurement up to ₹200 crore.