PM Modi announces 20 trillion stimulus package to restart economy

PM Modi offers revival plan for economy

Now that the government has finally announced a stimulus scheme, albeit in installments that makes an overall assessment impossible till the series finale is presented, the emphasis should be on speedy implementation of the scheme. A small enterprise dying for want of liquidity needs an immediate dose of cash, not a perfectly designed scheme, eligibility for which decorates its epitaph.

PM Modi announces ₹20 trillion stimulus package to restart economy

Key Highlight of PM Modi Economy Booster Package-

1. MSME Step-1-Collateral Free Automatic Loan for MSME. Those MSME having Loan upto 25cr and turnover upto 100cr will be covered in this scheme. 100% Central Govt Guaranteed. Will help 40 Lac Units. This loan will be for 4 Yrs with a Moratorium of 12 Months. 45 Lakh MSME Units will get benefit from It. Total 3 Lakh Cr Loan will be Given under this scheme.

2. MSME Step-2- 20000Cr will be infused as Subordinate Debt for stressed MSME. 2 Lakh SME will get benefit from this. Govt will provide 4000 cr to CGTSME Trust.

3. MSME Step-3- Their is a Fund of Fund to be created. Rs 50000cr will be infused as equity to standard MSME. Will help them to expand their capacities.

4. MSME Step-4- Definition of MSME changed. Investment Limit which defines a SME is changed. Now Turnover criteria is also introduced. Different between manufacturing and service SME is removed. Micro Units- Investment limit increased to 1Cr from 20Lakh. And Turnover can be upto 5Cr. Other changes are also done. For Medium Enterprise the limit increased to 10 Cr Investment and turnover 50Cr. 20Cr and 100Cr

5. MSME Step-5- Tenders upto 200Cr relating to Govt procurement will not be Global Tenders any more. mSME will get benefit out of it

6. MSME Step-6- E-Market Linkage will be Provided to all MSME due to less possibility of Trade fares. All Central Govt outstanding will be cleared within 45 Days by Govt Help of all MSME.

7. EPF Step-1- EPF Payment was paid by Govt for Mar, April and May now Extended by another 3 Months. 12%+12% will be paid by Govt of India.

8. EPF Step-2- Contribution reduced from 12% to 10% for those organisation having more than 100 employee is done now.

9. NBFC, MFI, HFC-Step-1- Special 30000cr Liquidity window will be given. Govt will buy debt papers of these institutions even if investment grade. These will be fully guaranteed by govt of India.

10. NBFC Step-2- To Give 45000cr Liquidity will be given to NBFC. First 20% Loss will be born by Govt of India. Even unrated papers will be get money under this scheme.

11. Discom Steps- Discom not able to pay the power generation Companies. 90000cr Special fund created to pay all outstanding of Power Generation Companies. PFC and REC will give this money

12. Contractors Step 6 Month extension will be given to all Govt contractors of Railways, Roads, Other departments. Govt Agencies will partially release Bank Guarantees to the extent of work completed. A Big Step.

13. Realestate Step- Covid19 can be treated as act of God. Using the Force Major Clause the project registration will be extended by 6 Month automatically. Completion dates of existing projects to be extended automatically by 6 Months by Govt authorities.

14. Tax Related Step- Non Salaried TDS and TCS rates will be reduced by 25% from existing rates. This will be effective from tomorrow and will remain till 31-03-2021.

15. Tax Related Step- All Pending Refunds will be issued immediately to all even above 5 Lakhs. For AY 2020-21 the ITR Dates extended to 30th Nov 2020, And Tax Audit Date extended to 31st October 2020.

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