Nirmala Sitharaman Highlights: Easier loans for MSMEs; income tax return deadline extended; lifeline for discoms

Nirmala Sitharaman press conference Highlights: FM Sitharman has made MSMEs bigger and has offered them collateral loans of Rs 3 lakh crore. The government has also eased pain of discoms, while extending deadline for income tax return for last fiscal.

Nirmala Sitharaman Highlights: Easier loans for MSMEs; income tax return deadline extended; lifeline for discoms

PM Modi’s Rs 20 lakh crore special economic package: Finance Minister Nirmala Sitharaman has announced collateral-free loans for MSME up to Rs 3 lakh crore. For the stressed MSMEs, she further announced Rs 20,000 crore liquidity to benefit around 2 lakh MSMEs. Stressed and NPA MSMEs will be eligible for this facility. FinMin has also decided to infuse capital of Rs 50,000 cr in MSMEs for their expansion. FM Sitharaman has also changed the definition of MSMEs which will allow them to still get the facilities even with higher investment in them. The government procurement, tenders up to Rs 200 crores will not be global tenders. Besides, liquidity of Rs 2,500 crore EPF support for business and workers for 3 more months has been announced due to which over 72 lakh employees are expected to be benefitted. For the NBFCs, FM Sitharaman has announced a special liquidity scheme and Rs 45,000 crore as a partial credit guarantee scheme. The government has also set aside Rs 90,000 for discoms against receivables through state-issued guarantees, to help clear gencos dues to reduce their stress. In today’s announcement, force majeure relief has also been provided to real estate developers and suo moto extension of 6 months have been provided for the projects registered on or before March 25. FM Sitharaman has extended the deadline for income tax return for FY21 by 3 months, while the provision of Vivad se Vishwas scheme has also been extended till December 31, 2020. Prime Minister Narendra Modi, in his quintessential shock-and-awe style, yesterday announced a humongous economic package, which sought to go beyond providing immediate relief against coronavirus fallout, to make India a self-reliant economic powerhouse in the decade to come.  

Watch: PM Modi’s Rs 20 lakh crore package more than expected; India reforms best during crisis

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21:08 (IST)13 May 2020
Loans will be used by Discoms to pay their dues to generating companies

As part of the stimulus package being rolled out by the Central Government, the Finance Minister has announced that there will be a cash infusion of INR 90,000 Crores in power distribution Companies. These amounts will be by way of loans from PFC/ REC which shall be raised from the market against a state government guarantee. The loans will be used by the Discoms to pay their dues to the generating companies – Deepto Roy, Partner, Shardul Amarchand Mangaldas & Co.

21:04 (IST)13 May 2020
Oxygen pumped in with Rs 90,000 cr liquidity to distribution companies

Oxygen pumped in with Rs 90,000 cr liquidity to distribution companies. This will get the cycle running wherein the Distribution companies will be able to pay all the dues of generating companies and finally the benefit will flow to the consumer – Rakesh Alshi, Partner, Deloitte India

19:48 (IST)13 May 2020
No mention about cost overrun during the period of moratorium

Six months extension for construction projects: Projects, which were impacted due to COVID-19, will be given six months extension to comply contract agreement in terms of project completion. This was broadly expected and likely to ease contractors’ concern about likely delay in completion and resultant penalties. However, there is no mention about the cost overrun during the period – Binod Modi, Senior Research Analyst at Reliance Securities.

19:47 (IST)13 May 2020
Relieving for real estate developers that the deadline date of project completion is extended

It is quite relieving for real estate developers that the deadline date of project completion is extended with new timelines for home buyers. While the COVID-19spread has been challenging for several sectors including real estate, the sector seems to be buoyant with several research reports highlighting that real estate is still considered the best investment option. This will be strengthened more by the various liquidity measures by the finance ministry that will help smoothen the rigidity normally being witnessed in the Indian realty market – Ashiana Housing Ltd. (AHL)

19:45 (IST)13 May 2020
Government’s liquidity dose a lifesaver for NBFCs

The Aatma Nirbhar package announced by the Government of India today for non-bank financial institutions (NBFIs), which include NBFCs, HFCs and MFIs, if implemented as envisaged, will be the anti-COVID shot in the arm that the sector urgently required. NBFIs have been reeling with liquidity challenges as loan repayments by their borrowers have dipped by almost 40-80% since the lockdown was imposed in March-end FY20. With banks largely shying away from incrementally lending to this sector and the moratorium approvals coming far and few, many NBFCs were on the brink of a liquidity crisis, which could have culminated into these defaulting on debt servicing obligations – Vydianathan Ramaswamy, Director, Ratings, Brickwork Ratings

18:27 (IST)13 May 2020
The moves announced today will get the debt paper moving – Amitabh Kant

Banks were only picking up AAA-rated paper and not even AA-rate paper but now with what the government has done with a special liquid scheme, it should really get this debt paper moving – Amitabh Kant, Niti Aayog Chief (on CNBC TV18)

18:13 (IST)13 May 2020
Robust MSME sector is key to improving economic strength and resilience of a country – Mahesh Singhi

Finance Minister Nirmala Sitharaman has laid a clear roadmap for the revival of the micro small and medium enterprises (MSMEs) sector in India which is passing through an unprecedented crisis. MSMEs are the backbone of the Indian economy and generate employment on a large scale for the population of the country. The roll-out of collateral-free loans worth Rs. 3 lakh crore for MSMEs will help to infuse much-needed liquidity in the sector and help these units address their cash flow problems. This move will prove crucial for MSMEs to kickstart business activities and provide job protection to employees. –

Mahesh Singhi, Founder & MD, Singhi Advisors
17:57 (IST)13 May 2020
Moot question is how quick these Rs 3 lakh crore worth loans can be sanctioned, disbursed – Anil Bhardwaj

The moot question is how quick these Rs 3 lakh crore worth loans can be sanctioned and disbursed. Subordinate debt is also very important, large part of the MSMEs will be facing problems and this will help them turn the story around. For the definition of MSMEs the government has taken the middle path and taken the turnover plus investment guide in deciding the definition of MSMEs. (on CNBC TV18)

17:54 (IST)13 May 2020
Not only fiscally responsible but also specifically aimed to connect weaker dots in economy – Jimeet Modi

One of the most astute stimulus package series-1 has been announced by our Finance Minister which is not only fiscally responsible but also specifically aims to connect the weaker dots in the economy. This is to quicken India’s revival as soon as the lockdown eases. Although late, the Government indeed came out with a superior proposition as compared to developed countries when seen in terms of specific targeting and effectiveness thereof. – Jimeet Modi, Founder & CEO, SAMCO Securities & StockNote

17:53 (IST)13 May 2020
Infrastructure sector could be a game-changer – Sandeep Upadhyay, MD – Infrastructure Advisory, Centrum Capital Ltd

Infrastructure sector could be a game-changer acting as a catalyst for the government to not just jump start the economy but also to lead the economy towards a sustained long term growth. Fresh injection of Rs. 90,000 Crs into DISCOMs would certainly lead to financially de-stress them and in turn improve the liquidity for Power Generation companies. This was long due and hopefully would lead to end consumers getting benefited in terms of cheaper tariffs, however that is likely to happen on a medium to long term. Going forward one needs to ensure that Developers and the investors get a clear understanding and the precise details of the upcoming projects to start preparing for it sooner than later. The extension of upto 6 months announced both for ongoing Construction contracts and concessions awarded on PPP model is a welcome move, however Contracting community is awaiting to hear on the outcome of force majeure provisions triggered during the COVID period on the Government contracts. While the intent of the Government demonstrated by augmenting scope of the grand NIP is both ambitious and commendable it is the roll out plan that really matters. – 

Sandeep Upadhyay, MD – Infrastructure Advisory, Centrum Capital Ltd.

17:43 (IST)13 May 2020
Rs 3 lakh crore collateral-free loans are necessary – Rajiv Kumar

Finance Ministry is trying to tell that a lot of loans have been given out but they have just not ben taken away right now owing to the lockdown. Banks and NBFCs are listed and they can not just hand out money which is why the Rs 3 lakh crore collateral-free loans are necessary. – Rajiv Kumar, Niti Aayog VC (on ET Now)

17:30 (IST)13 May 2020
Extension for real estate projects under RERA

Adversely impact due to COVID and projects stand the risk of defaulting on RERA timelines. Ministry of housing and urban affairs will advise states and UTs and their regulatory authorities in the following effect:

1) Treat coronavirus as an event of ‘force majeure’ under RERA

2) Issue fresh project registration certificates automatically with revised timelines

3) Extend the registration and completion date suo-moto by 6 months for all registered projects expiring on or after 25 March without individual applications.

17:21 (IST)13 May 2020

Among other measures, the due date of all income-tax return for financial year 2019-20 will be extended from 31st July, 2020 and 31st October, 2020 to 30th November, 2020 and Tax audit from 30th September, 2020 to 31st October,2020. All pending refunds to charitable trust and non-corporate business and professionals including proprietorship, LLP and co-operative shall be issued immediately.

17:15 (IST)13 May 2020
TDS and TCS rates cut by 25% till 31st March 2021; Will release Rs 50,000 crore liquidity

In order to provide more funds at the disposal of the taxpayers, the rates of Tax Deduction at Source (TDS) for non-salaried specified payments made to residents and rates of Tax Collection at Source (TCS) for the specified receipts shall be reduced by 25% of the existing rates. The move will result in Rs 50,000 crore liquidity, said the finance minister Nirmala Sitharaman in her speech.

17:12 (IST)13 May 2020
Extension of registration and completion date of real estate projects under RERA

The Ministry of housing and urban affairs will advise States/UTs and their Regulatory Authorities to extend the registration and completion date suo-moto by 6 months for all registered projects expiring on or after 25th March, 2020 without individual applications. 

17:09 (IST)13 May 2020
Central agencies will provide an extension of up to 6 months to contractors

In what can be called a major relief to contractors, all Central agencies will provide an extension of up to 6 months, without cost to contractor, to obligations like completion of work covering construction and goods and services contracts. Government agencies to partially release bank guarantees, to the extent contacts are partially completed to ease cash flow.

17:06 (IST)13 May 2020
Rs 90,000 crore liquidity injection for DISCOMs

To give a fillip to DISCOMs with plummeting revenue and facing an unprecedented cash flow problem, Government has announced Rs 90,000 Crore as Liquidity Injection for DISCOMs. With demand reduction, DISCOMs are facing an unprecedented cash flow problem.

17:03 (IST)13 May 2020
Rs 45,000 crore partial credit guarantee scheme for NBFCs

The government announces Rs 45,000 crore liquidity infusion through a Partial Credit Guarantee Scheme 2.0 for NBFCs: FM Nirmala Sitharaman

17:01 (IST)13 May 2020
Rs 30,000 crore special liquidity scheme for NBFCs, MFIs and HFCs

The government launches a Rs 30,000 crore Special Liquidity Scheme for non-banking financial companies, microfinance companies, housing finance companies. Under this scheme investment will be made in both primary and secondary market transations in investment grade debt paper for NBFCs, HFCs and MFIs.Securities will be fully guaranteed by the government.

16:58 (IST)13 May 2020
EPF contribution reduced for business and workers for 3 months, a liquidity support of Rs 6750 crore

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 & workers for 3 months, amounting to liquidity support of Rs 6750 crores: Finance Minister Nirmala Sitharaman

16:55 (IST)13 May 2020
Rs 2500 crore EPF support fr business and workers for three more months

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 Rs 2,500 crores: Finance Minister Nirmala Sitharaman. The move is expected to help 3.67 establishments or 72 lakh employees with a liquidity relief of Rs 2500 crore.

16:53 (IST)13 May 2020
All receivables of MSMEs will be cleared by government in 45 days

E-Market linkage for SMEs since trade fairs and exhibitions may not be held post coronavirus in place of trade fairs, all receivables to be cleared within next 45 days, the finance minister Nirmala Sitharaman said. 

16:50 (IST)13 May 2020
Global tenders to be disallowed upto Rs 200 crore

Global tenders to be disallowed in government procurement up to Rs 200 crore. This will make India self-reliant and will also boost the make-in-India initiative. Necessary amendments will be made to the General Financial Rules to this affect, curbing the unfair competition that Indian MSMEs face from foreign firms.

16:47 (IST)13 May 2020
Finance Miinister leaves space for amendment to laws pertaining to MSMEs

With the change in definition for MSMEs the finance minister has also raised the investment limit for these. Along with this, the finance minister has left space for amendments to the law in this context that will be brought. The finance minister has addressed a long-pending demand for revision with this.

16:45 (IST)13 May 2020
Definitions of MSMEs changed and investment revised upwards

Classification – Manufacturing and Servies

Micro – investment less than Rs 1 crore and turnover less than Rs 5 crore

Small – Investment less than Rs 10 crore and turnover of less than Rs 50 crore

Medium – Investment less than Rs 20 crore and turnover less than Rs 100 crore

16:39 (IST)13 May 2020
Equity infusion of Rs 50,000 crore for MSMEs through fund of funds

In the third scheme for the MSME sector, the finance minister said that a fund of funds will be set up for the MSMEs that are viable. The fund of funds will have a corpus of Rs 10,000 crore. The scheme as the finance minister said will help the MSME increase its size. 

16:36 (IST)13 May 2020
Second scheme for the MSMEs that are stressed

Under the schemes government will facilitate provisions of Rs 20,000 crore as subordinate debt. Around 2 lakh MSMEs are likely to benefit from this scheme of the government. Those MSMEs that are stressed will be eligible. 

16:33 (IST)13 May 2020
Collateral free loans for MSMEs announced by the Finance Minister

Collateral-free automatic loan to be up to Rs 3 lakh crore will be given out to the MSMEs with a time frame of 4 years with a 12 moratorium. 45 lakh MSMEs are to benefit from this scheme. Eligible must have turnover of Rs 100 crore.

16:24 (IST)13 May 2020
Stimulus package as announced by the Prime Minister to come in various tranches

“I shall come out beginning today to come out and discuss various tranches that will be a part of the plan laid out by the Prime Minister,” the Finance Minister said, making it clear that the stimulus package will come in various parts for various indutries.

16:21 (IST)13 May 2020
Finance Minister stresses on the aim of the government to help various sectors

“After the July budget we met several times and we made sure to address the needs of various sectors that were felt should be addressed,” finance Minister Nirmala Sitharaman said. She added that the aim of the government has been to address issues of various sectors since it has come to power.

16:18 (IST)13 May 2020
Focus on ease of doing business in India

Focus is on ease of doing business, ease of compliance, and regulation the finance minister said. She added that India will look to build brands and take them to the global level. She clarified that India will not become isolationist.

16:17 (IST)13 May 2020
FM Sitharaman recalls flagship schemes

FM Sitharaman highlights Direct Benefit Transfer based on Jan Dhan Yojana account; PM Awas Yojana; Ujjwala Yojana; Swacch Bharat Abhiyan; PM Fasal Bima Yojana; PM Kisan Yojana, etc schemes to recall the success of Modi government.

16:12 (IST)13 May 2020
Plan to make India confident in its ability : FM Sitharaman

Addressing a press conference to unveil the plan that was outlined by the Prime Minister yesterday, Finance Minister Nirmala Sitharaman said, ‘The plan is to make India confident in its abilities not isolate India from the world. We have the ability to contribute to the world as we have seen recently.” She added that the integration to global value chain is a part of the plan laid by the Prime Minister.

15:44 (IST)13 May 2020
This economic package is for our cottage industry, home industry, our small-scale industry, our MSME : PM Modi

This economic package is for our cottage industry, home industry, our small-scale industry, our MSME, which is a source of livelihood for millions of people, which is the strong foundation of our resolve for a self-reliant India. This economic package is for that labourer of the country, for the farmers of the country who are working day and night for the countrymen in every situation, every season. This economic package is for the middle class of our country, which pays taxes honestly and contributes to the development of the country. This economic package is for Indian industries, which are determined to give a boost to the economic potential of India. Starting tomorrow, over the next few days, the Finance Minister will give you detailed information about this economic package inspired by the ‘Self-reliant India campaign’. 

PM Modi in his address to the nation on May 12

15:34 (IST)13 May 2020
Credit guarantee worth Rs 3 lakh crore coming up for the MSME sector?

In the soon to be addressed press conference by Finance Minister Nirmala Sitharaman, the MSME sector could be getting Rs 3 lakh crore in terms of credit guarantees, said Times Now quoting sources.

15:31 (IST)13 May 2020
Mega relief package could have huge stimulus package for small businesses

Finance Minister’s mega relief package that is to be announced at 4 PM later today is likely to have a huge vaccine for the struggling MSME sector, Times Now said. The MSME sector could get a loan guarantee as a part of the relief package.

15:26 (IST)13 May 2020
Economic package 2.0 will bring immediate relief for MSME and migrant workers

The immediate positive impact would be a relief for MSME, enough work opportunities for all especially Daily Wagers/migrants & attracting more global investments thus transforming this short term crisis into a long term opportunity – Sunil Khosla, President Digital Business, India Transact Service Limited

13:49 (IST)13 May 2020
Government needs to announce a modified medium fiscal consolidation roadmap

The government now needs to announce a modified medium-term fiscal consolidation roadmap and make the necessary amendments to FRBM to reflect the new realities of a post-COVID world. The PM’s vision also needs to be supported by Reforms 2.0 in land, labor and the financial system. RBI needs to step up to be an equal growth partner to the governor by expanding its balance sheet and increasing its open market operations – Barnik Chitran Maitra, Managing Partner Arthur D Little, India 

13:44 (IST)13 May 2020
Government regulatory bodies should issue timely press releases to quell unfounded rumours and curb the spread of unnecessary panic

The industry has already incurred losses to the tune of Rs.22500 crores in over two months,and we hope that the stimulus package, the details of which are to be announced by the finance minister, provides incentives for the poultry industry. We also hope that government regulatory bodies issue timely press releases to quell unfounded rumours and curb the spread of unnecessary panic. – Nipun Gupta, Supervisory Board Representative, Vetphage Pharmaceuticals

13:40 (IST)13 May 2020
Viability Gap Funding may be one of the provisions in the economic package, which will help bring infrastructure sector back on track

I expect the Hon’ble Finance Minister to bring a robust stimulus package, maybe akin to Viability Gap Funding due to Covid-19, which will help bring the infrastructure sector back on track and thus, help in the development and rebuilding of the nation – Manoj K Singh, Founding Partner, Singh & Associates

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