Key Highlights of the Press Briefing by Finance Minister Nirmala Sitharaman on May 13th 2020

The FM has come out with the first part of stimulus package “Aatmanirbhar Bharat” out of 20 lakh crores announced by PM Narendra Modi yesterday in his address to the nation.

Aatma Nirbhar Bharat – Part 1 of the 20L Crore Economic Stimulus Package

Vision: –

The vision of the Atma Nirbhar Bharat Mission is to spur growth and make India self-reliant. Be vocal about them to make them global.

Five pillars of Atmanirbhar Bharat

  • Economy, Infrastructure, System, Vibrant Demography and Demand


Focus on factors of production for the above

  • Land ,Labour, Liquidity, Law


Will stress on

  • Ease of doing business,
  • Simplify Compliance and Diligence


Govt will keep working to make bold reforms until Atma Nirbhar Bharat is achieved

Today’s announcements :

FM has announced 15 measures which are discussed below :

6 measures for MSME :

  1. Collateral-free automatic loan for standard MSMEs (emergency credit line)
    • Rs 3 lakh crore worth loans for those firms with Rs 25 crore outstanding loans or annual turnover is over Rs 100 crores
    • 4 -year tenure on the loans
    • Moratorium of 12 months to be offered (i.e. no need to pay principal for first 12 months)
    • Interest to be capped
    • 100% credit guarantee to banks and NBFCs on principal and interest
    • Offer valid until October 31,2020
    • No fresh collateral required
    • No extra fee to be charged
    • 45L MSME to benefit out of this
  2. For stressed MSMEs (have a problem of equity)
    • Rs 20,000 crore liquidity through subordinate debt-based scheme
    • Govt to provide Rs 4,000 crore to CGTMSE for this
    • CGTMSE will provide partial Credit Gaurantee support to banks
    • 2 lac MSMEs to benefit
    • NPA or stressed MSME to benefit from this liquidity infusion
  3. Fund of funds
    • Infusing Rs 50,000 crore equity into MSMEs for those who are viable and have growth potential
    • Fund of Funds with Corpus of Rs 10,000 crore will help through mother-fund and daughter-fund framework
    • To help MSMEs expand capacity and eventually get listed
  4. “Definition of MSMEs is changing, which is in favour of the MSMEs” – FM
    • What are changes to MSME definition now?
      • Investment limit revised upwards
      • Addition criteria of turnover brought in to define MSMEs
      • Manufacturing and service-bases MSMEs to now enjoy same benefits
    • Why the New Definition of MSMES?
      • Low threshold in MSME definition have created a fear among MSMEs of graduating out of the benefits and hence killing the urge to grow.
      • There has been a long-pending demand for revisions.
  5. Tenders
    • Global tenders to be disallowed in government procurement upto Rs 200 crores
    • Tenders upto 200 crores will no longer be global tenders
    • Indian companies and MSMEs have faced unfair competition from foreign companies in case of global tenders.
    • This will also help MSMEs to improve their business.
  6. Post-Covid life
    • E-market linkages to be provided across the board to help make up for lack of trade fairs or exhibitions
    • Within the next 45 days, all receivables of MSMEs will be cleared by the GOI and CPSEs.
    • Fintech will be used for transaction based lending using data generated by e-marketplace.


2 measures of EPF

  1. Liquidity relief for all EPF establishments
    • Under Pradhan Mantri Garib Kalyan Package (PMGKP), payment of 12% of employer and 12% employee contributions was made into EPF accounts of eligible establishments.
    • This support will be extended by another 3 months to salary months of June, July and August 2020
    • Relief of Rs 2,500 crores to be provided to benefit 67 lakh establishments and for 72.22 lakh employees.
  2. To provide more take-home salaries and also increase cash-in-hand for employers
    • Government to take up PF for firms with 100 staff, earning less than Rs 15,000 those who are not covered under above
    • Statutory PF contribution reduced from 12% to 10%
    • For state PSUs, govt will continue to pay 12%, while govt staff pays 10%
    • The above is for next 3 months
    • This scheme will be applicable for workers who are not eligible for 24% EPF support under PM Garib Kalyan Package and its extension.
    • This will provide relief to about 5 lakh establishments covered under EPFO and about Rs. 4.3 crore such employees.
    • This will provide liquidity of 6750 Crore to employers and employees over 3 months.


2 measures NBFC, Housing finance & MFI

  1. For NBFC
    • Rs 30,000 crore special liquidity scheme announced
    • Investment to be made in primary & secondary investments
    • The debt papers will be fully guaranteed by government of India
    • This will supplement RBI measures to augment liquidity.
  2. Government announces Rs 45,000 crore liquidity infusion through a Partial Credit Guarantee Scheme 2.0 for NBFCs. First 20% of the loss will be borne by GOI, the guarantor.


For cash-desperate discoms

  • PFC/REC to infuse emergency liquidity of Rs 90,000 crore
  • Against receivables, guarantees for which will be given by states
  • This is one-time liquidity infusion.
  • Rebate to Discoms shall be passed on to the final consumers, i.e. Industry.


For Contractors

  • All GoI agencies, such as railways, roadways, will provide 6 month extension to contractors
  • No cost extension of upto six months for govt contractors to comply with contract conditions construction work, goods and services contract, completion of work
  • Government agencies to partially release bank guarantees, to the extent contracts are partially completed, to ease cash flows


For Real Estate Projects under RERA

  • Covid period should be treated as a force majeure and relax timelines
  • Registration and completion date should be extended suo-moto by 6 months for all registered projects expiring on or after 25th March, 2020 without individual applications


TAX Related Points

  1. Rs 50,000 crores liquidity through TDS/TCS rate reductio
    • In order to provide more funds at the disposal of the taxpayers, the rates of TAX Deduction at Source (TDS) for non-salaried specified payments made to residents and rates of TAX Collection at Source (TCS) for the specified receipts shall be reduced by 25% of the existing rates.
    • Payment for contract, professional fees, interest, rent, dividend, commission, brokerage, etc. shall be eligible for this reduced rate of TDS.
    • This reduction shall be applicable for the remaining part of the FY 2020-21 i.e. from tomorrow to 31st March, 2021.
    • This measure will release Liquidity of 50,000 crore.
  2. All pending refunds to charitable trusts, non-corporate business, LLPs and co-operatives will be processed immediately
  3. Dates extended for Tax Filings
    • 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


The government has already given stimulus of 1.7 lakh crore under “Pradhan Mantri Garib Kalyan Package”. That will also be part of the 20 lakh crore stimulus package as announced by Hon’ble PM Shri Narendra Modi.