How is the Aam Aadmi Benefitting from the ₹20 Lakh Crore “Atmanirbhar” Financial Package?

Money Matters

How is the Aam Aadmi Benefitting from the ₹20 Lakh Crore “Atmanirbhar” Financial Package?

Illustration: Robin Chakraborty

A day after Prime Minister Modi addressed the country through his favourite 8 pm slot and introduced the word “atmanirbhar” to our vocabulary, it was time for Finance Minister Nirmala Sitharaman to dive into the details of the mega ₹20 lakh crore economic package. The finance minister began her address by translating the word “atmanirbhar” into Tamil, Telugu, Malayalam, and Kannada for those from South India who might not know what it means.

In the first of multiple briefings, Nirmala Sitharaman announced a set of 15 measures: Six of these deal with MSMEs; two each are related to EPF and NBFCs, housing finance corporations, and MFIs; one each on discoms, contractors, and real estate; and three on tax measures. The announcements heavily focused on the MSME sector, and it began with a revision of the definition for MSME itself.

Measures for the MSME sectors included:

  1. Collateral-free loan for MSMEs upto ₹3 lakh crore.
  2. ₹20,000 debt programme for stressed MSMEs.
  3. Fund of funds with corpus of ₹50,000 crore for equity infusion in MSMEs.
  4. Global tenders to be disallowed for government procurement for tenders upto ₹200 crore.
  5. All MSME receivables to be cleared by Government/CPSEs within the next 45 days.
  6. Revision of definition of MSMEs.

The Finance Minister provided liquidity relief for provident fund, announcing that the government would pay EPF contribution for June-August, set to benefit 72 lakh employees. The statutory PF contribution was reduced from 12% to 10% while central and state PSUs will continue at 12%. Employees would be given the benefit of paying only 10%. This will increase take-home salaries.

In the next set of measures for NBFCs, the finance minister announced a ₹30,000 crore special liquidity scheme to buy investment-grade securities of NBFCs fully guaranteed by Government of India and a ₹45,000 crore partial credit guarantee scheme.

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Liquidity of ₹90,000 crore is set to be given to DISCOMS against their receivables so that they can pay for the power they have purchased. This is set to help the cash-strapped DISCOMS.

All contractors to central agencies like railways, road ministry, central public works department can be given an extension of up to six months without any additional costs. This covers construction works and goods and services contracts.

In a much-awaited announcement, the Finance Minister provided relief in relation to filing of income tax returns, extending the due date of all income tax returns for FY20 to November 30, 2020 from July 31 and October 31 earlier. Due date for tax audit has been extended to October 31 from September 31 earlier.

The finance minister is set to address more press briefings over the coming days, covering a host of sectors, and has warned everyone that they’ll be hearing the word “atmanirbhar” a lot from her, as India forms its economic revival plan around self-reliance.

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