On 12th May 2020, Prime Minister Narendra Modi announced a massive package of Rs.20 Lakh Crores (Approximately 10% of GDP) while addressing the nation on television in order to fight the economic effects of Coronavirus pandemic on the Indian economy.
Later on 13th May 2020, Finance minister Nirmala Sitharaman started announcing the detailed information about the 20 Lakh Crores package which was divided into 5 conferences focuses on self- reliant India (Aatma Nirbhar Bharat) – Comprises of land, labour, liquidity and laws. The emphasis was put on 5 pillars - Strong Economy, Better Infrastructure, Technology Driven System, Vibrant Demography and Demand.
Many things have been said about Rs.20 Lakh Crores package announced by the central government in order to provide support and strength to various sections of the society in this difficult time of Coronavirus outbreak. Now, it’s time to read these measures in detail –
Key Highlights of First Press Conference (13th May 2020)
In its first press conference, Finance minister Nirmala Sitharaman focuses on micro, small and medium enterprises as well as Non-banking financial corporations (NBFC’s) to boost liquidity, empower entrepreneurs and to provide strength to their competitive spirit. Following announcements are made –
- Offered collateral free loans up to 3 lakh Crores to MSME’s for 4 years with 12 moratoriums. MSME’s having turnover of Rs.100 Crores will be eligible for this scheme. 45 Lakh MSME’s to be benefitted.
- Provision of subordinate debts of Rs.20 Crores will be made to MSME’s under this scheme. MSME’s that are stressed will be eligible under this scheme. 2 lakh MSME’s to be benefitted.
- Setting up of fund of funds for the viable MSME’S with equity infusion of Rs.50000 Crores to help them increase their size.
- Revision on MSME’S classification as well as investment and turnover limits -
Micro - Investment less than Rs.1 Crores and turnover less than Rs.5 Crores are now classified as Micro enterprises.
Small - Investment less than Rs.10 Crores and turnover less than Rs.50 Crores are classified as small enterprises.
Medium - Investment less than Rs.20 Crores and turnover less than Rs.100 Crores are classified as medium enterprises.
- Global tenders to be allowed up to Rs.200 Crores. Necessary amendments to be made for this in General financial rule.
- All MSME’s receivables will be cleared in 45 days by the Government.
- EPF support of Rs.2500 Crores for 3 months to businesses & workers.
- Reduction in EPF contribution for 3 months to businesses & workers – liquidity support of Rs.6750 Crores.
- Special liquidity scheme of Rs.30000 Crores for NBFC’s, Micro finance companies and housing finance companies.
- Partial credit guarantee scheme of Rs.45000 Crores to NBFC’s.
- Liquidity injection of Rs.90000 Crores to DISCOM in order to deal with unprecedented cash flow problem.
- Up to 6 months of extension to contractors by central agencies like railways, highway, CPMD etc.
- Extension to the dates of registration and completion of real estate projects expiring on or after 25th march 2020 under RERA act.
- Transfer of Rs.52606 Crores to 41 Crore Jan Dhan account holders.
- Extension to some of the important dates –
- IT return filing due date extended from 31st July to 30th November
- Payment under Vivaad se Vishwas Scheme extended till 31st December 2020.
- Extension to the due dates of time barred assessment
- 30th September 2020 extended to 31st December 2020
- 31st March 2021 extended to 30th September 2021
- Immediate processing of all pending refunds to LLP’s, non-corporate businesses, co-operatives and charitable trusts.
- Increase in take home salaries and employer’s cash in hand.
- Reduction in PF statutory contribution from 12% to 10%
- PF will be provided by the government to the firms having staff of 100 persons earning less than Rs.15000
- 25% deduction in TDS & TCS rates on payment of all contracts for FY 2020-21
- COVID-19 period will be treated as “Force Majuere” for real estate projects as per the directions issued by Ministry of Housing and Urban Development.
- Guarantor will bear the loss of 20% incurred by NBFC’s.
Key Highlights of Second Press Conference (14th May 2020)
In the second press conference, Finance minister Nirmala Sitharaman focuses on providing liquidity support to farmers & rural economy, migrant workers & labourers, small businesses & street vendors. Following announcements are made
Measures for Farmers & Rural Economy
- 63 Lakh approved agricultural loans of Rs.86600 Crores between March 1 & April 30.
- Refinancing of Rs.30 Crores to regional rural & rural co-operative banks as additional emergency capital fund provided by NABARD for crop loan requirement (Additional to Rs.90000 Crores provided by NABARD during this year through normal refinancing route)
- Rs.4200 Crores already offered to states to support rural infrastructure in March 2020 under rural infrastructure development fund.
- Sanctioning of working capital limit of Rs.6700 Crores to state government for procurement of agriculture produce since March 2020.
- Credit boost of Rs.2 Lakh Crores at concessional interest rates provided to 2.5 crore farmers under Kisan credit card special drive which includes both fisher & animal husbandry farmers too.
- Front loaded on top facility offered to 351 district cooperative banks, 43 RRB’s & 33 state cooperative banks in order to lend farmers and to fulfill their harvesting requirements.
Measures for Migrant workers & Labours
- Rs.11000 Crores provided by the central government to states in state disaster response fund which shall be utilized for setting up shelters of migrant labourers as well as providing them food & water.
- Government supporting self-help groups in order to generate employment opportunities.
- Support to migrant labourers
- Increase in wages from Rs.182 to Rs.2020
- 40-50% more labourers enrolled in comparison to the month of May in the previous year.
- State/UT’s advised to provide work to migrant labourers as per the provisions mentioned in the act.
- Government continuation to MGNREGA work during season of monsoon through horticulture plantations and work related to livestock.
- Amendments in parliament to benefit workers such as introduction of National floor wage concept, appointment letter for all workers, correctly & timely payment of wages to unorganised workers & annual health check-up. Occupational safety & health code to establishments involved in work of hazardous nature too (even if workers are less than 10)
- 5 Kgs of wheat or rice and 1 Kg/family of chana will be offered by the government for 2 months to Non-PDS card holders absolutely free. This facility will be provided through states. Total amount allocated – Rs.3500 Crores.
- Introduction of National portability cards i.e. one ration one card for use in 23 states at any ration shop all across country. It is to be implemented most probably by August.
- 1200 Shramik special trains are available which will take migrant labourers to their home states. 300 trains to run every day for which both centre & states working together.
- Affordable rental accommodation to migrants and urban poor under Pradhan Mantri Awaas Yojna.
Measures for Small Businesses
- Interest subvention of Rs.1500 Crores for Mudra-Shishu loan
- Loan Moratorium already granted by RBI.
- Rs.1500 Crores relief to Mudra-Shishu loanees (Maximum loan amount being Rs.50000)
- Interest subvention of 2% from government for 12 months to payees.
Measures for Street Vendors
- Special credit facility of Rs.5000 Crores to street vendors
- Initial working capital up to Rs.10000
- Support to 50 Lakh street vendors
- Special scheme to be launched for street vendors within a month for their easy access to credit
- Monetary rewards and enhanced working capital credit on good repayment behaviour on digital payments.
Measures for Tribals
- Use of compensation afforestation fund management and planning authority funds to generate employment opportunities for Tribals and Adivasis from afforestation and plantation works, artificial regeneration etc.
Measures for Middle Income GroupsH3
Measures for Middle Income Groups
Rs.70000 Crores offered by government to boost housing sector by extending credit linked subsidy scheme (CLSS). It is specifically for middle income groups (6 Lakhs – 18 lakhs) and will start from May 2020.
Key Highlights of Third Press Conference (15th May 2020)
In the third press conference, Finance Minister Nirmala Sitharaman focuses on benefits provided to agriculture, fisheries, animal husbandry and allied activities. Following announcements are made –
Measures for Agricultural Organizations
- Provision of Rs.1 Lakh Crores offered to start up’s, aggregators, farmer producer organizations (FPO’s) in order to strengthen farm gate infrastructure to farmers.
- Immediate creation of funds
Measures for Micro-Size Food Enterprises
- Support to farmer producer’s organizations, self-help groups and co-operation for existing micro size food enterprises.
- Follow the cluster based approach
- Support to mission be Vocal for local
- Organic, nutritional, health and safety products
- Benefit to 2 Lakh micro enterprises
- Support will be provided in reaching untapped export markets for health improvement
- Technical upgradation to build brands, achieve FSSAI food standards and marketing.
- To increase global outreach
Measures for Fisheries & Aquaculture
- Rs.20000 Crores to be provided under Pradhan Mantri Matsya Sampada Yojana
- Rs.11000 Crores to be offered for fisheries, aquacultures and marine activities.
- Rs.9000 Crores for infrastructure
- Exports will be doubled to 100000 Crores
- Employment opportunities for 55 Lakh persons
- Additional production of 70 lakh tonnes over 5 years.
- Focusing on aspirational districts, Himalayan states and islands.
Measures for Animals
- Rs.343 Crores proposed for population of 53 crore animals
- National animal disease control programme for farmer, animals and animal keepers
- 100% vaccination for all shops, cattles, goats, pigs and buffaloes
- Eradication of foot and mouth diseases
- This work will continue in green zones
- 1.50 crore cows & buffaloes are already vaccinated
Measures for Animal Husbandry
- Rs.15000 Crores proposal for animal husbandry infrastructure fund
- Invitation to private investment for dairy sector.
- Incentives will be offered by the government for establishing plants for exporting of Niche products
- Objective to support value addition, dairy processing and cattle feed infrastructure
Promotion of Herbal Cultivation
- Investment of Rs.4000 Crores proposed in next 2 years
- National medical board proposed
- 800 hectares corridor area of river Ganga borders will be used for growing herbal & medicinal plants.
- Use of regional mandis
- Area of 25 Lakh acres comes under cultivation of medicinal plants leads to farmer’s income generation of Rs.5000 Crores.
- Planning investment of Rs.500 Crores
- Benefit to 2 lakh bookkeepers
- Offering honey, wax and beehive products
- Reduction in cross pollination
- Development of quality bee breeders and nucleus stock
- Standards implementation and development of traceability systems.
- Marketing, collection, infrastructure development and storage centres.
Key Highlights of Fourth Press Conference (16th May 2020)
In the 4th Press conference, Finance minister Nirmala Sitharaman focuses on structural reforms in sectors that will soon become the new horizon of growth in the coming time – More investment, more production and more employment opportunities. Following announcements are made
- Rs.50000 Crores will be spend by the government on coal evacuation infrastructure
- Nearly 50 coal blocks will be allowed by government for auction
- New allotments to be done for coal gasification
- 500 mining blocks will be offered through joint auction for mineral sector
- Government allows the sale of unused materials to achieve better efficiency in mining and production
- Joint auction for coal mineral and bauxite blocks for boosting employment, saving electricity and developing state of art technology
- Restrictions on import of certain weapons
- Separate budget will be provided for domestic capital procurement in order to reduce the import bill
- Corporatization of ordinance factory board
- FDI limit increases from 49% to 74% in defence manufacturing under automatic route.
- Government will support contract management in defence manufacturing by setting up project management unit.
- Steps will be taken by government for optimum utilization of air space in order to reduce air distance and fuel consumption (60% of air space is freely available)
- Rs.13000 Crores will be invested in 12 airports to provide better world class facilities.
- Benefit of Rs.1000 Crores annually to aviation sector from better utilization of airports resulting in reduction to airlines maintenance cost and increase in efficiency of civilian flying
- Privatization of DISCOMS in union territories which will bring stability in private sector
- Investment of Rs.8100 Crores for viability gap funding in social infrastructure (increased from 20% to 30%)
- Private space tech companies are advised to use ISRO facilities and other relevant assets in order to improve their capacities.
- Establishment of research reactor in order to produce medical isotopes
- Government will take measures to leave more cash in hands of people.
Key Highlights of Fifth Press Conference (17th May 2020)
In the 5th Press conference, Finance minister Nirmala Sitharaman focuses on MGNREGA, businesses and COVID-19, ease of doing business, health (Rural & urban) and education, de-criminalization of companies act and steps for public sector enterprises as well as state government and related resources. Following announcements are made
- Central government will try to discriminate most of the sections under companies act.
- No fresh insolvency to be initiated for 1 year
- Immediate launching of one nation one digital education and one class one channel programmes under PM E-Vidya programme
- Public health care expenditure will be increased by central government
- Addition of 200 new books to E-pathshaala
- Additional allocation of Rs.40000 Crores to MGNREGA scheme.
- Health insurance of Rs.50 Lakh per person will be offered to health workers. Total amount of Rs.15000 Crores released by PM
- Centre will borne 85% of ticket cost for Shramik special trains carrying migrant workers.
- 20 crore women holding Jan dhan account will get Rs.10025 Crores -
- Building and construction workers – Rs.3950 Crore
- Free LPG cylinders to 6.81 Crore people
- Online advance EPFO withdrawal facility to 12 Lakh EPFO holders
- Put emphasis on “Jaan hai to Jahan hai” ensuring both lives & livelihood
- Beneficiaries of National Social Assistance Programme got Rs. 1405 Crores in its first instalment and Rs.1402 Crores in second instalment, nearly achieved the target of Rs.3000 Crores.
- Direct benefit transfers played an important role in transferring cash as relief to various account holders under PM Garib kalyan Yojana.
- Borrowing limits of states are increased from 3% to 5% for Financial year 2021
- Government to open all sectors for private players.
- 60% Increase in ways advance limits (WMA) for states by RBI, specifying the continuous overdraft position to be 21 days instead of 14 days.
- Direct listing of securities in foreign jurisdictions is now allowed for companies.
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