On Tuesday 13th May 2020 finance minister Nirmala Sitharaman said that the Aatmanirbhar Bharat rests on five pillars: Economy, Infrastructure, Technology-driven systems, Demography, and Demand. The focus will be on factors of production: Land, Labour, liquidity, and Laws. “The intention behind this is to make local brands global.”
This thought and implementation is in favor of all MSMEs. They have a chance and a big platform to revitalize and grow their businesses.
Here are some key takeaways from the announcement by finance minister:
Nine major steps for the revival of the MSME sector:
- Collateral free loan of Rs 3 lakh crores for MSMEs. This will benefit 45 lakh units so that they can resume work, Grow and save jobs.
- For stressed MSMEs, the Subordinate debt provision of Rs 20,000 cr has been announced for 2 lakh MSMEs. It will benefit those who are NPAs or stressed MSMEs.
- Rs 50,000 crore equity infusion through a Mother fund and Daughter funds framework for MSMEs that are viable but need hand-holding. A fund of funds with a corpus of Rs 10,000 crore will be set up to help these units expand capacity and help them list on Markets if they choose.
- The definition of MSMEs has been revised to allow them to aim for expansion and not lose benefits. Also, there’ll be no distinction between the manufacturing & services sector MSMEs.
Micro units: Investment upto Rs 1 crore & turnover of less than Rs 5 crore. Small units Investment upto Rs 10 crore & turnover of less than Rs 50 crore. Medium units with investment up to Rs 20 crore & turnover of less than Rs 100 crore.
- Global tenders will be disallowed up to Rs 200 crore for government contracts.
- Ministry will ensure e-market linkages are provided across the board in the absence of non-participation in trade fairs due to COVID. Govt of India and PSUs will clear all the receivables in the next 45 days.
- A reduction of 25% of existing rates of Tax Deducted at Source (TDS) & Tax Collection at Sources (TCS) from tomorrow till March 31, 2021. This will release Rs 50,000 crores.
- Due date of all IT Return filings extended from July 31 to November 30.
– “Vivaad se Vishwas scheme” extended till December 31, 2020.
– Date of assessments getting barred as on Sep 30, 2020, extended to December 31, 2020.
– Date of assessments getting barred as on March 31, 2021, extended to September 30, 2021.
- Rs 30,000 crore special liquidity scheme for investing in investment-grade debt paper of NBFCs, HFCs and MFIs. These NBFCs are those that are also funding MSMEs. These will be fully guaranteed by the government of India.
Important: The government is ensuring that present coronavirus pandemic is prevented from making a serious dent on the Indian economy. It wants that investments should not be stopped and banks should ensure that all eligible borrowers get sufficient funds.
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