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May 13, 2020

Atmanirbhar Bharat : Indian Govt's measures to support Indian Economy against COVID-19 with Rs 20 lakh crore package

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Prime Minister Narendra Modi yesterday announced a Special economic and comprehensive package of Rs 20 lakh crores - equivalent to 10% of India’s GDP amid the coronavirus pandemic. He gave a clarion call for आत्मनिर्भर भारत अभियान or Self-Reliant India Movement.  He also outlined 5 pillars of Aatmanirbhar Bharat :
  1. Economy
  2. Infrastructure
  3. System
  4. Vibrant Demography 
  5. Demand
During the press conference today, Finance Minister Nirmala Sitharaman announced that the definition of MSMEs has been revised. Investment limit has been revised upwards and additional criteria of turnover has been introduced. Further, the distinction between manufacturing and service sector has been eliminated.

The investment limit of ₹25 lakh for micro units has been increased to ₹1 crore. To provide more funds at the disposal of taxpayers, the Government has also reduced TDS rates for non-salaried payments and TCS rates by 25% till March 31, 2021.  Due date of all income tax returns for the Financial Year 2019-20 will be extended from July 31, 2020 and October 31, 2020 to November 30, 2020. Furthermore, tax audit getting barred on September 30, 2020 has been extended to October 31, 2020. Date of those assessments getting barred on March 31, 2021 will be extended to September 30, 2021. 

Sitharaman announced a Special Liquidity Scheme worth ₹30,000 crore for NBFCs, HFCs and MFIs as they have been struggling to raise capital amid COVID-19. Here are some important measures taken by government for relief and credit support related to businesses, especially MSMEs to support Indian Economy’s fight against COVID-19
  • Due Dates for various tax relatedcompliances extended
  • EPF Contribution to be reduced for Employers and Employees for 3 months to 10% from 12% for all establishments covered by EPFO for next 3 months
  • Extending the Employees Provident Fund Support for business and organised workers for another 3 months for salary months of June, July and August 2020
  • New Definition of MSME and other Measures for MSME
  • No Global tenders for Government tenders of uptoRs 200 crore
  • Reduction in Rates of ‘Tax Deduction at Source’ and ‘Tax Collected at Source” by 25% for the remaining period of FY 20-21
  • Relief to Contractors given by extension of up to six months for completion of contractual obligations, including in respect of EPC and concession agreements
  • Relief to Real Estate Projects the registration and completion date for all registered projects will be extended up to six months.
  • Rs 20,000 crore Subordinate Debt for Stressed MSMEs
  • Rs 3 lakh crore Emergency Working Capital Facility for Businesses, including MSMEs
  • Rs 50,000 crore equity infusion through MSME Fund of Funds
  • Rs 90,000 crore Liquidity Injection for DISCOMs
  • Rs. 30,000 crore Special Liquidity Scheme for NBFC/HFC/MFIs
  • Rs. 45,000 crore Partial credit guarantee Scheme 2.0 for Liabilities of NBFCs/MFIs
  • Tax relief to business as pending income tax refunds to charitable trusts and non-corporate businesses and professions to be issued immediately
Download the Presentation made by Finance Minister under Aatmanirbhar Bharat Abhiyaan to support Indian economy in fight against COVID-19 from HERE

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