Finance minister unravels ₹20 lakh cr relief

Announcing the first set of components of the Rs.20-lakh-crore COVID-19 economic stimulus package announced by Prime Minister Narendra Modi, Union finance minister Nirmala Sitharaman said the measures will help “spur growth and build a very self-reliant India”.

The government on Wednesday announced about Rs.6-lakh-crore package, including Rs.3 lakh crore of collateral-free loans for small businesses and a Rs.30,000-crore lifeline to non-bank and housing finance companies as part of measures to help the economy tide over disruptions caused by the coronavirus lockdown. Further a Rs.45,000-crore partial credit guarantee scheme 2.0 was also announced for NBFCs, HFCs, and MFIs with low credit rating to help them extend a loan to individuals and MSMEs.

The government announced a Rs.90,000-crore liquidity injection plan that would allow the discoms to clear their dues towards power generation companies. Sitharaman said that the liquidity window for discoms was essential as its revenue has plummeted in the midst of unprecedented cash flow problem accentuat- ed by demand reduction. Power sector financiers will infuse liquidity to discoms against receivables. Loans will be extended against state guarantees for exclusive purpose of discharging liabilities of discoms to gencos.

In a relief to taxpayers, the government on Wednesday extended the deadline for filing of all income tax returns for 2019-20 fiscal till November 30, 2020. “From tomorrow till March 31, 2021, the TDS/TCS rates have been reduced by 25 per cent of the existing rate. It would release nearly Rs 50,000 crore in the hands of the people who would have otherwise paid it as TDS,” Sitharaman said.

The Centre will provide Rs 2,500-crore EPF support for businesses, workers for three more months. The scheme was provided earlier for the salary months of March, April and May. Consequently, this support will be extended by another three months for the salary months of June, July and August.

The finance minister also announced reduction of statutory provident fund contribution by both employers and employees to 10 per cent of basic wages from the existing 12 per cent for the next three months. The decision has been taken to facilitate more take-home salary for employees and give relief to employers in payment of PF dues, resulting in a liquidity ease of Rs.6,750 crore.

The deadline for completion of projects will be extended by up to six months, treating the coronavirus outbreak as an event of ‘force majeure’ under the realty law, Real Estate (Regulation and Development) Act. The relief will be given to all the registered projects under RERA, expiring on or after March 25.

In a move to provide more scope for Indian companies, including MSMEs, the Centre has decided to disallow global firms from participating in government procurement tenders up to Rs.200 crore. 

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