PM Modi announced a special economic package worth Rs 20 lakh crore to enable self-reliant India.
The economic package is 10% of the GDP.
The new economic package is to be used to provide relief to labourers, middle class, farmers and industries that have suffered the most due to lock down.
The package will address the five important aspect of production supply chain: Land, Labour, Liquidity, Law and Local.
The scheme will not only help to strengthen the chain of local supply but will also promote the locally produced products.
Under the new scheme, the Finance Minister announced 15 different measures.
The Scheme will also focus on Vocal for Local.
Highlights
The Government has changed the definition of MSMEs by increasing the investment limit upwards.
Also, earlier, only investment was used to define MSMEs.
With the changed definition both investment and turnover is used to define MSMEs.
It is to be noted that for an enterprise to come under the category of MSME it has to fulfil both investment and turn over conditions.
Also, under the new definition, the differentiation between the manufacturing and service based MSMEs is being removed.
Loans worth to Rs 3 lakh crore are made collateral free for MSME sector.
This is extended to firms whose outstanding loans are Rs 25 crore or those firms whose annual turnover is Rs 100 crore.
Loan tenure is 4 Years with moratorium of 12 months on principal amount.
Interest will be capped
No Guarantee fee is required; however, 100% credit guarantee cover will be given to Banks & NBFCs on principal as well as interest.
Global tenders will be disallowed in government procurement for tenders upto Rs 200 crores.
The Tax Deducted at Source (TDS) and Tax Collected at Source (TCS) rates are to be reduced by 25%.
This will last till March 2021.
The deadline of Vivad Se Vishwas Scheme is postponed to 31st December 2020.
Today, under Employment Provident Fund scheme, 12% is contributed by the employee and 12% by the employer.
For next 3 months, private employers and their employers need to pay only 10%.