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FM Nirmala Sitharaman May 13 announcements highlights: MSMEs get a helping hand

FM Nirmala Sitharaman Announcements: The government has announced measures to help businesses, including micro, small and medium enterprises (MSMEs), recover from the economic impact of the coronavirus (COVID-19) pandemic.

By: Express Web Desk | New Delhi | Updated: May 15, 2020 5:09:27 pm
nirmala sitharaman, nirmala sitharaman press conference live, nirmala sitharaman economic package, nirmala sitharaman economic package announcement, nirmala sitharaman press conference updates, nirmala sitharaman press conference today Finance Minister Nirmala Sitharaman during a press conference in New Delhi on Wednesday. (Express photo by Anil Sharma)

FM Nirmala Sitharaman Announcements Live Updates: Union Finance Minister Nirmala Sitharaman Wednesday announced a slew of measures to help businesses, including micro, small and medium enterprises (MSMEs), recover from the economic impact of the coronavirus pandemic. This was a part of the Rs 20 lakh crore stimulus package announced by Prime Minister Narendra Modi a day before to spur growth and help build a self-reliant India.

In a bid to provide support to the struggling MSME sector, the government announced collateral-free automatic loans worth Rs 3 lakh crore. It also changed the definition of MSMEs by revising upwards the investment limit and bringing in an additional criteria of turnover size of the company. Further, it said it would no longer allow global tenders for government procurement of up to Rs 200 crore. Read Nirmala Sitharaman announcements highlights

For taxpayers, the government reduced the rates of Tax Deduction at Source (TDS) and Tax Collection at Source (TCS) by 25 per cent, with effect from May 14, 2020 to March 21, 2021. It has extended the date for filing income tax returns to November 30, 2020 and tax audit to October 31, 2020. The EPF contribution was also reduced for businesses and workers for three months to 10 per cent from 12 per cent.

Senior Congress leader P Chidambaram Wednesday said there was nothing for the for the poor, hungry and migrant workers in Finance Minister Nirmala Sitharaman’s announcement on the Rs 20 lakh crore special Covid economic package today and it was a “cruel blow dealt to those who toil every day”. He also said there was nothing by way of cash transfer to the nearly 13 crore families in bottom half of the population who have been “pushed into destitution”.

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Finance Minister Nirmala Sitharaman has unveiled measures in a press conference for businesses, including MSMEs, to recover from the economic impact due to coronavirus (COVID-19). These are part of the Rs 20 lakh crore stimulus announced by PM Narendra Modi in his address the nation. It will help the Atmanirbhar Bharat Abhiyan (self-reliance India campaign). Read latest news and updates in Tamil, Bangla, Malayalam

09:12 (IST)14 May 2020
New MSME definition has a message: No longer have to stay small to avail benefits

The government Wednesday broadened the definition of Micro, Small and Medium Enterprises (MSMEs) by revising the limit of investment in machinery or equipment and introducing a “turnover” criteria — a reform measure that seeks to reverse the traditional policy bias in favour of units staying small in order to qualify for benefits.

As per the proposal, for which amendments to the law will need to be made, micro enterprises will be those with investment of up to Rs 1 crore and turnover of up to Rs 5 crore — the earlier definition classified investments of up to Rs 25 lakh for manufacturing and up to Rs 10 lakh for services.

For small enterprises, the classification covers up to Rs 10 crore in investment and Rs 50 crore in turnover, against investment of up to Rs 5 crore in manufacturing and up to Rs 2 crore in services.

For medium enterprises, the investment limit has been doubled for manufacturing enterprises from Rs 10 crore to Rs 20 crore and quadrupled for services from Rs 5 crore to Rs 20 crore, in addition to the turnover criteria of up to Rs 100 crore for both sectors in this size.Read more here

08:37 (IST)14 May 2020
Move will restore stability in financial markets: SBI chief

Banks are set to extend funds to lower rated non-banking financial companies and housing finance companies following the government’s decision to offer credit guarantee support on Wednesday. Banks which were pressing for a guarantee from the government to lend money to NBFCs despite the RBI opening a liquidity window for NBFCs and microfinance firms have welcomed this government guarantee announced in the stimulus package.

“The envisaged support of full credit guarantees to the lower rated NBFC and HFC entities will restore stability in financial markets and could act as a clear enabling factor for compressing credit spreads,” SBI Chairman Rajnish Kumar said.“The measures for MSME through guarantees, equity infusion and debt support will incentivize bank lending to MSMEs as well as providing crucial support to stressed entities in the current situation,” Kumar said. Read more here

07:50 (IST)14 May 2020
What MSME package means

The main thrust of Wednesday’s announcements was a relief to Medium, Small and Micro Enterprises (MSMEs) in the form of a massive increase in credit guarantees to them. There was, however, very little actual fiscal outgo that was announced. In other words, instead of directly infusing money into the economy or giving it directly to MSMEs in terms of a bailout package, the government has resorted to taking over the credit risk of MSMEs should they want to remain in business.

Loans to MSMEs are mostly given against property (as collateral) because often there isn’t a robust cash flow analysis available. But in times of crisis, like the one currently playing out, property prices fall and this inhibits the ability of MSMEs to seek loans. It also means that banks are less willing to extend loans. A credit guarantee by the government helps as it assures the bank that its loan will be repaid by the government in case the MSME falters. Full explained here

07:40 (IST)14 May 2020
First dose is liquidity: MSMEs get mega guarantee

While the 16 specific announcements announced in the first tranche cut across sectors that range from MSME and Non Banking Finance Companies (NBFCs) to real estate and power distribution, the overarching theme was that of infusing liquidity in Nirmala Sitharaman's Wednesday announcement.Sitharaman said banks and NBFCs can provide emergency credit lines to MSMEs up to 20 per cent of their outstanding credit as on February 2, 2020, with these loans having a 4-year tenor, a 12-month moratorium on principal payments, and a cap on interest costs.

A total of Rs 3 lakh crore is projected to be disbursed under this scheme that will be open until October 31, 2020. Sitharaman said this measure could help nearly 45 lakh units to resume business activity.Read more here

00:50 (IST)14 May 2020
Self-reliant India: Which are the sectors dependent on imports, which are not

Electrical equipment such as smartphones and computers are a key part of India’s import bill. The value addition in India’s electronics industry is limited to mostly assembly, while the country depends on imports to access most of the primary and critical components used to make them, including printed circuit boards (PCBs). For instance, around 88 per cent of the components used by the mobile handsets industry are imported from countries like China, according to the Confederation of Indian Industry. READ FULL EXPLAINED HERE

23:54 (IST)13 May 2020
30,000 crore support for NBFCs, HFCs, MFIs in economic package

Finance Minister Nirmala Sitharaman on Wednesday announced a Rs 30,000 crore special liquidity scheme for non-banking financial institutions to provide credit support to the sector amid the coronavirus crisis.

Further, a Rs 45,000 crore partial credit guarantee scheme 2.0 was also unveiled for non-banking financial companies (NBFCs), housing finance companies (HFCs), and microfinance institutions (MFIs) with low credit rating to help them extend loans to individuals and MSMEs. Under the Rs 30,000 crore special liquidity scheme, the minister said investments will be made in both primary and secondary market transactions in investment-grade debt papers of these institutions.

22:01 (IST)13 May 2020
Credit guarantees to MSMEs: What are they and how will they help

Finance Minister Nirmala Sitharaman announced some details of the Atmanirbhar Bharat Abhiyan economic package on Wednesday. This is the second tranche of the package that includes past actions by the Reserve Bank of India as well as the first Covid-19 relief package announced during March and April.

What are credit guarantees?

Loans to MSMEs are mostly given against property (as collateral) because often there isn’t a robust cash flow analysis available. But in times of crisis, like the one that is currently on, property prices fall and this inhibits the ability of MSMEs to seek loans. It also means that banks are less willing to extend loans.

21:46 (IST)13 May 2020
COAI: Hope FM gives relief to the telecome sector

Rajan S Mathews, DG, COAI: “Finance Minister’s announcement is in line with the government’s aim to provide the necessary impetus to economic growth and build a ‘self-reliant’ India. We welcome the announcement of all pending payments within 45 days from PSEs to MSME sector. The telecom industry has unutilised GST input tax credit over INR 35,000 crore for which the sector has repeatedly demanded refund.

"Moreover, the total outstanding from PSUs is amounting to approx. INR 20,000 crore since long. We hope the Hon’ble Finance Minister, Smt Nirmala Sitharaman, in the course of next few announcements would give similar relief to the sector that has immensely contributed to keeping the country connected during last 25 years and has kept 1 bn people connected during the current lockdown situation.”

21:31 (IST)13 May 2020
Odisha CM Naveen Patnaik lauds Centre on economic package

Odisha CM Naveen Patnaik on FM Nirmala Sitharaman's economic package announcement: The economic revival package announced by @FinMinIndia has given hope to the Micro, Small & Medium Enterprises sector in the country. The stimulus package will generate lakhs of jobs for workers in the vast #MSME sector.

The package for employment and economic revival will now largely mitigate the distress of working class who were impacted by #COVID19 pandemic and nation-wide lockdown thereafter.

21:24 (IST)13 May 2020
Economic package a 'farce', propagates old policies that led to economic crisis: Left parties

The Left parties on Wednesday said the economic package announced by Finance Minister Nirmala Sitharaman failed to address the immediate concerns of people, describing it as a "farce" that propagated the policies which had in the first place led to an economic crisis even before the onset of the coronavirus pandemic.

"The so-called 'package' by Modi govt is a farce. Those who urgently and immediately need help are walking hungry on the roads or looking for a meal from somewhere. This is completely insensitive to the existential crisis being faced by crores.

"We are witnessing the pettiest form of politics from Modi govt. There is nothing for the state govts which have been asking for funds, as they are at the forefront of fighting the pandemic. Nothing for them, not even their legitimate dues!," CPI(M) general secretary Sitaram Yechury said in a tweet.

CPI general secretary D Raja said, "They had brought the economy to its knees even before the pandemic. From both the PM and the FM we were expecting some immediate relief for the working class and the migrants. This has not come. They did not address the issues of joblessness and hunger.

"The FM's address was just regurging and promotion of the government's economic policy over the last six years which had led to the economic crisis in the first place even before coronavirus." (PTI)

21:13 (IST)13 May 2020
Centre failed to address humanitarian crisis caused by lockdown, says Punjab CM

Punjab Chief Minister Amarinder Singh on Wednesday expressed disappointment at the Centre's alleged failure to address the humanitarian crisis resulting from the lockdown, saying immediate intervention in the unorganised labour sector should have been a top priority in the fiscal relief package.

Unveiling the first set of components of the Rs 20 lakh crore COVID-19 economic stimulus package announced by Prime Minister Narendra Modi, Sitharaman said Rs 90,000 crore liquidity infusion will be made in electricity distribution companies to help them fight the current financial stress.

Singh said it was unfortunate that the finance minister had not deem it fit to balance the needs of the MSMEs, NBFCs and the housing sector with the urgent requirements of the lakhs of migrant labourers facing unprecedented problems due to the current crisis.

Citing the prime minister's emphasis on securing 'jaan' with 'jahan', the chief minister said the first set of announcements by the finance minister showed no intent at protecting lives. (PTI)

20:52 (IST)13 May 2020
Modi govt committed to reviving economy, help MSMEs: Amit Shah

Union Home Minister Amit Shah on Wednesday said the Narendra Modi government is committed to reviving the economy, help small businesses and boost employment in the challenging time of coronavirus pandemic.

In a series of tweets, Shah said the central government is doing everything possible to help those in the business sector as they may face financial stress while resuming their work following the lockdown to combat the coronavirus pandemic.

"I thank PM @narendramodi and FM @nsitharaman for these unprecedented steps, targeted at assisting MSMEs, cope with challenges of COVID-19.

"It reflects PM Modi's commitment to revive our economy, help small businesses and boost employment," he tweeted with the hashtag '#AatmaNirbharBharatAbhiyan'.

20:04 (IST)13 May 2020
Yediyurappa lauds PM and FM for announcing stimulus package to revive economy.

Karnataka Chief Minister B S Yediyurappa on Wednesday welcomed the Centre's Rs three lakh crore financial support to the industrial sector which is one of the worst hit due to the coronavirus induced lockdown since March 24.

Yediyurappa lauded Prime Minister Narendra Modi and Finance Minister Nirmala Sitharaman for announcing Rs 20 lakh crore stimulus package to revive economy, which includes Rs three lakh crore to the MSMEs.

"This is a very timely and scientific move with expertise and collateral free loans for MSMEs will boost them to resume operations. This will benefit 45 lakh MSMEs in the country," PTI quoted Yediyurappa as saying.

The Rs 90,000 crore aid to electricity supply companies of the states, income tax exemption and return of Rs 50,000 crore, payment of Rs 6,750 crore towards Employees Provident Fund contribution of employees and the entrepreneurs and Rs 30,000 crore aid for non-banking finance institutions will help the industries and employees, the chief minister noted.

He was optimistic that the no-global tender for upto Rs 200 crore will stimulate the growth of Indian companies.

Hailing the Central government, Yediyurappa said, "None of the Covid-19 affected countries have announced such a huge economic revival package for the industrial sector in the world. This is a bold step towards motivating people to exit lockdown system to work and earn their bread." (PTI)

19:57 (IST)13 May 2020
Self-reliant India: Which are the sectors dependent on imports, which are not

Electrical equipment such as smartphones and computers are a key part of India’s import bill. The value addition in India’s electronics industry is limited to mostly assembly, while the country depends on imports to access most of the primary and critical components used to make them, including printed circuit boards (PCBs). For instance, around 88 per cent of the components used by the mobile handsets industry are imported from countries like China, according to the Confederation of Indian Industry.

Over 60 per cent of the country’s medical devices are imported as well. Other products heavily imported into the country are cells and modules used by the country’s solar power industry. Read more in this explained

19:25 (IST)13 May 2020
Shivraj Singh Chouhan: Relief package will boost 'swadeshi' products

Madhya Pradesh CM Shivraj Singh Chouhan: "Relief measures for MSME sector announced by FM today, are truly the roadmap to build Aatmanirbhar Bharat. I believe that the economic package by PM will help MSMEs. Small industries, micro industries and medium industries will be boosted and it'll increase job opportunities."

"This will also boost local, boost 'swadeshi'. We'll walk towards self-reliance. If global tenders will be disallowed in govt procurement tenders up to Rs 200 cr then our local companies, especially the small ones, will gain a new strength." (ANI)

19:21 (IST)13 May 2020
Economic package a big zero: Mamata Banerjee on economic package announcement

People expected to get relief ...but it’s a big zero. There is nothing for the States: West Bengal CM Mamata Banerjee on the economic package announced by FM Nirmala Sitharaman today. (ANI)

18:51 (IST)13 May 2020
PM Modi: Today's announcements will go a long way in addressing issues faced by businesses, especially MSMEs

Prime Minister Narendra Modi tweets on the announcements made by FM Nirmala Sitharaman today: "Today’s announcements by FM @nsitharaman will go a long way in addressing issues faced by businesses, especially MSMEs. The steps announced will boost liquidity, empower the entrepreneurs and strengthen their competitive spirit."

18:48 (IST)13 May 2020
'Swadeshi 2.0 will be about an industrial resurgence, welcoming foreign manufacturers to India'

N Venkatram, CEO, Deloitte India on the announcements made by Finance Minister Nirmala Sitharaman today

“The announcement made over the last two days is one of the most important steps we are taking post Independence. Swadeshi 2.0 will be about an industrial resurgence, welcoming foreign manufacturers and technology into India, and creating world class products in India for domestic consumption as well as for export. A confident, stronger, dependable and predictable India is key to active participation in the global supply chain.

This is a long term story we are building. We should not look for easy solutions for the short term, but aim to be in a better and financially stronger place in 3 to 5 years. Revival of entrepreneurship and required regulatory changes will result in a radically transformed India in 10 years from now.”

18:43 (IST)13 May 2020
ANAROCK chairman on FM Nirmala Sitharaman's announcement for real estate sector

Anuj Puri, Chairman – ANAROCK Property Consultant on FM Nirmala Sitharaman's announcement of relief package

Today’s announcement is much in line with the government’s aim to spur economic growth and build a ‘self-reliant’ India. In the first of the series of announcements the FM will make over the next few days, the real estate sector, NBFCS/HFCs and MSMEs got a major boost on day one.Providing a major relief to real estate developers, the government has extended the timeline for project completions and registration by 6 months. This is a big move that will destress developers significantly, since construction activity had been halted all across the country. Homebuyers’ wait for their homes will get extended by this move, but this was in any case inevitable.

18:39 (IST)13 May 2020
Bank Bazaar CEO: Govt should enable 100% contactless access to credit to help MSMEs avail proposed loans digitally

Bank Bazaar CEO Adhil Shetty: "We welcome the slew of measures announced by Finance Minister Nirmala Sitharaman to ease the liquidity problems of MSMEs through fresh cash infusions, collateral-free loans with moratoriums, and by loosening their tax compliance compunctions. We would also urge the government and the regulator to enable 100% contactless access to credit to help MSMEs avail the proposed loans digitally. MSMEs need quick access to credit but they also want to avoid the health risks inherent to face-to-face meetings with lending institutions. It is therefore imperative now to make the entire credit supply chain—including KYC—100% digital. Credit seekers must be allowed to apply for loans via their phones and to complete their KYC digitally via Video Customer Identification Process or Aadhaar OTP-based e-KYC. A 100% contactless credit supply chain not only helps solve ongoing liquidity problems but also prepares us for a future where the health risks become endemic. The coronavirus may return in a second wave, and operationalising digitally now is the only way out."

coronavirus, coronavirus latest news, covid 19 india, lockdown extension, lockdown extension news, coronavirus live news, news, live news, corona news, corona latest news, india coronavirus, coronavirus live news, coronavirus latest news in india, coronavirus live update, covid 19 tracker, india covid 19 tracker, covid 19 tracker live, corona cases in india, corona cases in india, coronavirus latest news in india Prime Minister Narendra Modi addressed the nation five days ahead of the end of the third phase of the lockdown.

On Tuesday, Prime Minister Narendra Modi said the country should view the Covid-19 crisis as an opportunity to achieve economic self-reliance. In his address to the nation, he stressed on the importance of promoting “local” products. He called it Atmanirbhar Bharat Abhiyan (or Self-reliant India Mission) and said that in the days to come, his government will be unveiling the details of an economic package towards this aim, which, after including the earlier reliefs announced by Finance Minister Nirmala Sitharaman and the RBI, would be worth Rs 20 lakh crore — or 10 per cent of GDP in FY20.

Divergent views emerged from the Congress, with some leaders welcoming the package and others saying the Prime Minister has only given the country a “headline”. Party MP Manish Tewari tweeted, “@PMOIndia ‘s speech can be summed up in one word — Headline Hunting. A number — 20 lakh crores. No details.”

Read | PM Modi’s self-reliant India Mission economic package: Here’s the fine print

The Trinamool Congress was sceptical. “We saw the box today. We saw the wrapping paper today. But what is in the product. we don’t know. For that, we have to open the package tomorrow or day after. He (Modi) said 20 lakh crores, 10 per cent of GDP, but (there was a) little asterisk there saying some conditions apply.,” party leader Derek O’Brien said.

CPM general secretary Sitaram Yechury said it was difficult to comment on the package or the fourth phase of lockdown in the absence of details. He, however, said it was unfortunate that the Prime Minister did not speak about providing relief to the crores of migrant workers. “We were all expecting the Prime Minister to announce some facility or relief for them. But there was no word… And what about the lakhs of people who are hungry.”

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“The four big problems confronting India: distress of migrants, resources that States need, Hunger and Unemployment were not addressed at all,” Yechury said.

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