Today, 13th May 2020, FM Nirmala Sitharaman announced India Mega Economic Package (Atmanirbhar Bharat Part-1). Beneficiaries Covered in this Incentives are : –

1. Micro, Small and Medium Enterprises (MSMEs)
2. NBFCs, Housing Finance Companies, and Micro Finance Institutes
3. Direct Taxation
4. Employer-Employee benefits
5. Other Benefits

1 Micro, Small and Medium Enterprises (MSMEs)

• Three Lakhs Crore Collateral Free Loans is proposed to be disbursed to the standard MSMEs who need additional funds.

Terms and Conditions:-

1. Tenure of Loan shall be 4 year
2. A moratorium of 12 months shall be given on principal repayment
3. Borrowers up to 100 Cr. turnover & 25 Cr. outstanding are eligible
4. 100% credit guarantee cover to banks & NBFCs
5. The scheme can be availed till 31^st Oct 2020

• Twenty Thousand Crore subordinated debts are proposed to be provided for stressed MSMEs . (Debts given by bank to be infused through promoters as equity)

• Fifty Thousand Crore equity to be infused into potential & viable MSMEs promoting them to list in their respective markets in future (Such equity to be infused through the concept of Fund).

• Scope of definition of MSMEs has been widened

Changes Proposed:-

1. The distinction in the definition of Manufacturing & Service based MSMEs is proposed to be removed.
2. Limits of Micro, Small & Medium has been raised as follows:-
   • Units shall be called as Micro Enterprise if investment up to 1 crore is done & Turnover is reached up to 5 crores.
   • Units shall be called as Small Enterprise if investment up to 10 crores is done & Turnover is reached up to 50 crores.
   • Units shall be called as Medium Enterprise if investment up to 20 crores is done & Turnover is reached up to 100 crores.

(*Summary chart has been attached for the reference)

• No Global tender shall be issued for Government procurements up to Rupees Two Hundred Crore.

• E-Market linkage shall be provided to MSMEs (As a replacement for Trade Fairs and Exhibitions).

• All MSMEs receivable from government and CPSE shall be released within the next 45 days.

2. NBFCs, Housing Finance Companies and Micro Finance Institutes

• NBFCs, Housing finance Company & Mirco Finance Institutes shall be benefitted with a Thirty Thousand crore Special Liquidity Scheme in the form of investment in grade debt papers. (And such securities shall be fully guaranteed by Government of India).

• NBFCs with low credit rating to be given a cover of Partial Credit Guarantee Scheme resulting in liquidity of Rs Forty-Five Thousand Crores. (First 20% loss shall be borne by Central Government and  AA paper & unrated paper shall also be eligible for the scheme) .

3. Direct Taxation

• W.e.f 14^th May 2020 till 31st Mar 2021, rates of TDS for Non-Salaried Specified payments made to resident and TCS for specified receipts shall be reduced by 25% of the existing rates.
• All Pending refunds to a charitable trust, NPOs, Non-Corporate Business, and Profession including Proprietorship, Partnerships, LLPs, and Cooperatives shall be issued immediately
• Due Date of all Income Tax Return shall be extended from 31^st July 2020  & 31^st October 2020 to 30^th November 2020
• Due Dates of Tax audit shall be extended from 30^th September 2020 to 31^st October 2020.

• Date of Assessment which was to be barred on 30^th September 2020 shall be extended to 31^st December 2020. And assessment getting barred on 31^st March 2021 shall be extended to 30^th September 2021.

•  Vivad Se Vishwas scheme has been extended up to 31st December 2020 (And no extra payment shall be asked for such extension).

4. Employer-Employee Benefits

• EPF Contribution of employer & Employee at the rate of 12% shall be paid by Government till August-2020 under PMGKP (Benefit being extended from May 2020 to August 2020).

• For Employers-Employees not covered in the above scheme, for the next 3 months, they shall be allowed to pay 10% as their contribution to EPF instead of 12% (This Exemption not extended to Central and State PSUs).

5. Other Benefits

• Emergency Liquidity Infusion of Ninety Thousand Crores shall be given to DISCOMS for discharging their liabilities towards GENCOs.

• All central government agencies shall give 6 months extension to contractors for complying with the contract condition such as completion of work or achieving the milestone. Also, governments shall release Bank guarantees against the partial completion of work for the ease of cash flows.

• Covid-19 shall be treated as “force majeure” for Real Estate developers against their project registration & project completion under RERA. And deadlines for all such projects expiring on or after 25^th March 2020 shall be extended by 6 months. (Regulatory Authority may even extend this date by further 3 months if needed)