New Delhi: Finance Minister Nirmala Sitharaman said Wednesday that self-reliant India does not mean cutting off from rest of the world. Nirmala Sitharaman made the comment while addressing the media about the details of the special economic package. Prime Minister Narendra Modi had said Tuesday that the main points of the package will be stated by the finance minister.
Nirmala Sitharaman said Rs 18,000 crore refund will be given to tax payers. From this 14 lakh taxpayers will benefit from clearing of refund dues. She also said that collateral free loan will be provided to SMEs with 12 month moratorium. A total of 45 lakh units will benefit. She also said Rs 20,000 crore subordinate debt for stressed MSMEs will be provided and two lakh MSMEs will gain from this move.
The finance minister also announced Rs 50,000 crore equity infusion through MSME Fund of Funds. This will provide support potential MSMEs wanting to grow.
This is the first occasion that the finance minister met the media since the outbreak of COVID-19 in India.
Sitharaman also outlined the change in definition for MSMEs. She said companies with investment of Rs 1 crore and turnover of Rs 5 crore will be a micro enterprise under new definition. Companies with Rs 10 crore investments and a turnover of Rs 50 crore will be termed small enterprise. Those with Rs 20 crore investment and Rs 100 crore turnover will be called medium enterprise
Relief for contractors
The finance minister announced up to six months extension for completion of obligations under highways, railways and other contracts. The move will provide relief to contractors impacted by the COVID-19 crisis.
“The extension of up to six months without cost to contractor is to be provided by all central agencies. Among them are the Railways, Ministry of Road Transport & Highways and Central Public Works Department,” Sitharaman said.
Sitharaman said this covers construction works and goods and services contracts besides obligations like completion of work. To ease cash flows, government agencies will partially release bank guarantees, to the extent contracts are partially completed, she said.
Rs 3 lakh crore collateral-free loans to small businesses
Sitharaman also announced Rs 3 lakh crore of collateral-free loans for small businesses. She also cut the tax rate for non-salary payments. She provided liquidity to non-banking companies to help them tide over the disruptions caused by the lockdown.
Sitharaman said Rs 90,000 crore liquidity infusion will be made in electricity distribution companies. It will help them fight the current financial stress.
Also, dates for filing income tax returns and other assessments have been extended. She said the rate of TDS and tax collected at source (TCS) for non-salaried payments up to March 31, 2021, will be cut by 25 per cent. The move will release Rs 50,000 crore in the system, informed Sitharaman.
Boost for real estate developers
In a relief to real estate developers, Sitharaman said that the deadline for completion of projects will be extended by up to six months. She said that the government is treating the coronavirus outbreak as an event of ‘force majeure’ under the realty law RERA.
The relief will be given to all registered projects under the Real Estate (Regulation and Development) Act, called RERA. Projects which were scheduled to end March 25 will get the benefit. Incidentally the nationwide lockdown was first implemented March 25.
The real estate industry has been demanding that the deadline for completion of projects should be extended by at least six months. This is because construction work had come to a halt due to lockdown.
The regulators can extend the registration and completion date suo motto by six months for all registered projects, Sitharaman said.
Agencies