Sitharaman announces boost to MSMEs; EPF support to workers, businesses: Key points

In her address to media on Rs 20 crore stimulus package to battle Covid-19 crisis, Finance Minister Nirmala Sitharaman on Wednesday said the economic initiative is to spur growth and make India ‘self-reliant’.

During the briefing, the finance minister made a series of announcements, including one where she said that the government has launched a Rs 30,000 crore Special Liquidity Scheme for non-banking financial companies, microfinance companies, housing finance companies.

Here’s taking a quick look at the top announcements:

1. TDS, TCS rate for non-salaried payments for period up to March 31, 2021 has cut by 25%. The move will release Rs 50,000 crore.

2. Due date for Income Tax returns for the year 2019-2020 has now being extended from 31st July and 31 October to 30 November 2020.

3. In order to provide more take home salary for employees and to give relief to employers in payment of Provident Fund, Employees’ Provident Fund Organisation (EPF) contribution is being reduced for businesses and workers for 3 months, amounting to liquidity support of Rs 6,750 crores, the finance minister announced.

4. To ease financial stress as businesses get back to work amid the coronavirus crisis, the government has decides to continue EPF support for business and workers for 3 more months providing a liquidity relief of Rs 2,500 crores.

5. Rs 50,000 crore equity infusion for MSMEs through Fund of Funds; to be operated through a Mother Fund and few daughter funds; this will help to expand MSME size as well as capacity.

6. Global tenders to be disallowed in government procurement up to Rs 200 crores. “This will make self-reliant India, will also then be able to serve ‘Make in India’ cause,” she said.

7. The government and Central Public Sector Enterprises will honour every MSME receivable in the next 45 days, the finance minister said.

8. “Definition of MSMEs has been revised, investment limit to be revised upwards, additional criteria of turnover also being introduced,” the finance minister stated.

9. In a major relief to contractors, all central government agencies to 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.

10. The finance minister also announced Rs 90,000 crore liquidity injection for Power Distribution Companies (DISCOMs).