Rs 4.5 Lakh Crore Boost For Companies In First Instalment Of PM’s “Atma Nirbhar” Package

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Finance Minister Nirmala Sitharaman unveiled the first set of measures under the government’s “Atma Nirbhar Bharat” economic package on Wednesday to support workers and businesses struck by the nationwide lockdown to curb the coronavirus pandemic. “Essentially this is to spur growth and to build a very self-reliant India,” Nirmala Sitharaman said, as she announced the first instalment of a series of steps aimed at enabling the country combat the economic fallout from the virus crisis. The Finance Minister’s blueprint of the government’s economic package came a day after Prime Minister Narendra Modi announced monetary and fiscal support of Rs 20 lakh crore to revive an economy already struggling with slowing expansion even before the COVID-19 pandemic.

Here are 10 things to know about the first set of announcements made by Nirmala Sitharaman:

  1. “Beginning today, I will lay out details of PM’s Vision over next few days,” she said in a media briefing that lasted about 90 minutes. The Finance Minister said the Atma Nirbhar Bharat package will be partly funded through additional government borrowing already announced.

  2. The government will provide loan guarantees worth Rs 4.5 lakh crore to help Micro, Small and Medium Enterprises (MSMEs), non-banking financial companies and power distribution firms access collateral-free loans from banks, the Finance Minister said.

  3. That included collateral-free loans – also known as unsecured loans – worth Rs 3 lakh crore for MSMEs with turnover up to Rs 100 crore, a move likely to benefit 45 lakh businesses by October 31, Nirmala Sitharaman said. 

  4. The government tweaked the definition of MSMEs, recognising a larger number of businesses under the segment to push growth. For example, companies with investments of Rs 1 crore and turnover of Rs 5 crore will now be recognised as micro enterprises.

  5. Ms Sitharaman announced a liquidity infusion of Rs 90,000 crore for power distribution companies through state-run finance companies. 

  6. The Finance Minister also announced an extension in the due dates applicable for filing the current financial year’s income tax returns to November 30, and for tax audits to October 31.

  7. The Finance Minister lowered taxes such as TCS (tax collected at source) and TDS (taxes deducted at source) for non-salaried service providers by 25 per cent effective May 14 through March 31, putting cash worth Rs 50,000 crore in the hands of people. 

  8. For the salaried, the Finance Minister reduced the contribution mandated by private sector employers to the retirement corpus of their staff by 2 percentage points (200 basis points) for three months – a move likely to lead to a raise in take-home salaries for the employees. State-run firms will continue to pay 12 per cent as employer contribution, she said.

  9. The Finance Minister said the government will allow realty companies to claim relief from regulatory penalties for up to six months when completion of projects is delayed due to COVID-19, and permit only domestic companies participate in government tenders up to Rs 200 crore.

  10. The seven-week coronavirus-triggered lockdown has halted all non-essential consumption and left more than 10 crore people jobless, while putting the economy on course for its first annual contraction in four decades. 

Author: ApnayOnline

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