India's finance minister Nirmala Sitharaman announced details of the £200 billion stimulus package to restore the health of Indian economy hit by Covid-19 and to reboot all sections of society, including the middle-class, MSMEs, labourers, farmers and the industry. Sitharaman said banks will provide £30 billion as automatic collateral-free loans to standard micro, small and medium enterprises (MSMEs). The government will also provide credit guarantee to banks and non-banking finance companies for both principal and interest till 31 October under the scheme.
Following are details of the package:
■ The finance minister announced £3 billion special liquidity scheme for non-banking financial institutions, microfinance companies, housing finance companies to provide credit support to the sector amid the coronavirus crisis.
■ The government announced collateral free automatic loans to MSMEs worth £30 billion having four year tenor, valid up to October 31st, 2020. This will enable 45,00,000 MSME units to resume business activity and also safeguard jobs.
■ Global tenders to be disallowed in government procurement up to £20 million. This will make self-reliant India, will be able to serve 'Make in India'
■ Due date for Income Tax returns for the year 2019-2020 extended from 31 July and 31 October to 30 November 2020.
■ TDS/TCS rates to be reduced by 25% till March 31, 2021
■ To ease financial stress as businesses get back to work, government decides to continue EPF support for business & workers for 3 more months providing a liquidity relief of £250 million.
■ In order to provide more take home salary for employees and to give relief to employers in payment of PF, EPF contribution is being reduced for businesses and workers for 3 months, amounting to liquidity support of £675 million.
■ The government announced £4.5 billion liquidity infusion through a Partial Credit Guarantee Scheme 2.0 for NBFCs
■ Pound 9 billion liquidity injection for Power Distribution Companies (DISCOMs)
■ Ministry of Housing to advise States/UTs and their Regulatory Authorities to extend registration and completion date suo-moto by 6 months for all registered projects expiring on or after 25 March, 2020 without individual applications. Treat COVID-19 as an event of 'Force Majeure' under RERA.
