Nirmala Sitharaman Press Conference Highlights: Finance Minister Nirmala Sitharaman today ended a long wait for economic package 2.0 by announcing a slew of measures, primarily aiming at MSMEs, NBFCs, real estate, and liquidity support to people. FM Sitharaman detailed out part of Prime Minister Narendra Modi’s Rs 20 lakh crore economic package that he unveiled yesterday. Today’s announcement was based on 15 key decisions, out of which 6 were directed towards MSMEs. The primary focus was given to ease the pain of small businesses, real estate, and electricity distribution companies. For individuals, the government extended the deadline for income tax return and announced a major provident fund facility. Here Nirmala Sitharaman Press Conference Highlights in detail:
What’s there for MSMEs?
FM Sitharaman has announced Rs 3 lakh crores collateral-free automatic loans for businesses, including MSMEs. These loans will have 4 year tenor with a moratorium of 12 months on principal repayment. For the stressed MSMEs, the FM has further announced Rs 20,000 crore liquidity, which is aimed at benefiting around 2 lakh MSMEs. MSMEs which are stressed and NPAs will also be eligible for this facility.
In addition to the relief given to MSMEs, the Finance Ministry has also decided to infuse capital of Rs 50,000 cr in the MSMEs in an effort to help them expand. In another major breakthrough, the Finance Minister has changed the definition of MSMEs which will allow them to accept higher investment and still fall under the category of MSMEs.
Manufacturing enterprises investing less than Rs 25 lakh, less than Rs 5 crore, and less than Rs 10 crore in the manufacturing sector were defined as micro, small and medium enterprises respectively so far, which has now been significantly increased.
With the revised definition, manufacturing and service MSMEs have been combined to enjoy the same benefits. Investment less than Rs 1 crore and turnover under Rs 5 crore will be defined as micro-units while small businesses will be those with investment less than Rs 10 crore and turnover under Rs 50 crore. Medium enterprises will be those with investment under Rs 20 crore and turnover les, s than Rs 100 crore. Besides, the government procurement for tenders up to Rs 200 crores will not be considered as global tenders so that MSMEs can participate.
Perks for real estate sector
The government has provided a major relief for the real estate sector. It has made Force majeure applicable for the projects registered on or before march 25. Hereafter, suo moto extension of 6 months has been given on the completion date of those projects, consequently, the extension of registration and completion date of the real estate projects under RERA is given.
Relief for electricity distribution companies
The government has also set aside Rs 90,000 for discoms against receivables through state-issued guarantees, to help clear generating companies dues to reduce their stress. The discoms are burdened with heavy debts.
Measures for individuals, companies
The government has provided Rs 2500 crores EPF support for businesses and workers for 3 more months. EPF contribution has also been reduced for businesses and workers for 3 months, which will make an impact of Rs 6750 crores on the government. Also, the income tax return deadline for FY20 has been extended by 3 months and the provision of Vivad se Vishwas scheme has also been extended till December 31, 2020. Meanwhile, the EPF contribution has also been reduced from 12 per cent to 10 per cent for the next three months.
Gift for NBFCs, HFCs, MFIs
FM Sitharaman has announced Rs 30,000 crores liquidity facility for NBFCs, HFCs, and MFIs. On top of that, Rs 45,000 crores have also been awarded for partial credit guarantee scheme for NBFCs. With this move, the government has also tried to help the realty sector as most of these financial units give funds to the real estate companies.