New Delhi, Business Desk. Finance Minister Nirmala Sitharaman on Sunday announced the last phase related to the economic package of Rs 20 crore. In the package brought in the midst of the Coronavirus crisis, several relief measures have been announced by the government for farmers, migrant laborers, working-class, MSMEs, and NBFCs. Apart from this, the government has said to encourage private investment in eight sectors including coal, mineral mining, aviation. Prime Minister Narendra Modi announced this package on Tuesday, pledging self-reliant India. The Finance Minister informed about the efforts and proposed steps taken by the government in five installments from Wednesday to Sunday.
A look at the important announcements made in the last five days
The government will contribute three more months to EPF
While announcing the Pradhan Mantri Garib Kalyan Yojana (PMGKY), the Finance Minister had said that the Government of India would contribute the
EPF contribution for the month of March, April, and May for the eligible companies. The government has now extended this relief by three months. This means that for eligible companies, the EPF employee and employer share will also be contributed by the central government in June, July, and August as well. This decision of the Center will benefit both companies and employees. According to the Finance Minister, 3.67 lakh companies and 72.22 lakh employees will benefit from this decision.
To ease financial stress as businesses get back to work, the government decides to continue EPF Support for Business & Workers for 3 more months providing a liquidity relief of Rs 2,500 crore.#AatmaNirbharBharatAbhiyan pic.twitter.com/02uw5GO1TE
Reduced contribution of both employee and employer
While announcing the relief package, the Finance Minister informed about the decision to reduce the contribution of both employee and employer in the PF funds from 12-12 percent to 10-10 percent. The reduction in the contribution to the PF fund is for the next three months. However, CPSEs and state PSUs will contribute to the PF fund at the rate of 12 percent as before. In order to provide more take-home salary for employees and to give relief to employers in payment of PF, EPF contribution is being reduced for Businesses & Workers for 3 months, amounting to liquidity support of Rs 6750 crores. #AatmaNirbharBharatAbhiyan pic.twitter.com/VSysfvk4KU
Many announcements for MSME sector
The Finance Minister announced a series of measures for micro, small and medium scale industries (MSMEs) affected by the lockdown. On Wednesday, he announced a Rs 3 lakh crore loan facility for the MSME sector without any guarantee. It is a collateral-free loan scheme, which will benefit 4.5 million MSMEs. He said that this loan will be given to MSMEs for four years. With this, MSMEs will not be required to repay the principal for 12 months after getting the loan. He also announced the creation of a Rs 50,000 crore fund of funds for MSMEs.
TDS / TCS rates cut by up to 25%
The government has announced a 25% reduction in the TDS rate on payments other than non-salaried payments. Along with this, the TCS rate has also been drastically reduced by 25%. According to the government, there will be a benefit in the reduction of the TDS rate on payments like contracts, professional fees, interest, rent, dividends, commission brokerage. This deduction has come into effect from May 14, 2020, and will remain in force till March 31, 2021. According to the government, people will get additional liquidity of Rs 50,000 crore.
Deadline to file income tax returns extended
The government has extended all types of income tax returns for the financial year 2019-20. Now the deadline for filing the income tax returns of the last financial year has been extended to 30 November 2020. The government has also decided to increase the period of tax audit from September 30, 2020, to October 31, 2020.
Free food grains to ration workers without a ration card
The government has announced this in view of the problems of migrant laborers affected by the lockdown. Under this announcement, free food grains will be distributed to the migrant laborers without any ration card. Under this scheme, the government will give five kilograms of free grain per person per month for the next two months. The government will also give one kg per month to every family for the next two months. This initiative of the government is expected to benefit eight crore workers. The government will spend Rs 3,500 crore on this head.
- Free food grain supply to #Migrants for 2 months
▪️ About 8 crores migrants to benefit from this
▪️ Rs. 3500 Crore will be spent on this intervention for 2 months: @nsitharaman
One Nation One Ration Card Scheme
After the implementation of this scheme, migrant workers will be able to get their share of ration in any corner of the country. It is expected to benefit 67 crore people by August 2020. Also, the government is expecting 100 percent coverage by March 2021.
50 lakh street-dwellers will get the loan on easy terms
The central government has announced a loan of up to Rs 10,000 on-street terms to street vendors. The government will introduce this scheme within a month. It is expected to provide relief to 5 million street-vendors. The government will spend Rs 5,000 crore on this plan. The government will encourage street vendors to facilitate digital payments under this scheme.
Loans will be given to farmers through KCC
The Finance Minister said that the beneficiaries of PM farmers are being given loans at concessional rates through KCC. He said that fishermen and livestock would also be included in this campaign. This decision will also provide institutional loans to fishermen and livestock farmers at low interest. This decision of the government will benefit 2.5 crore farmers. The government has set a target of giving a loan of Rs 2 lakh crore more through KCC.
Rs 2 lakh crore Concessional credit boost to 2.5 crore farmers through #KisanCreditCards;
Fishermen and Animal Husbandry farmers will also be included in this drive #AatmaNirbharBharatPackage pic.twitter.com/Dbv3D7wpqt
Amendments to the Essential Commodities Act
The Finance Minister has said that the Essential Commodities Act will be amended. Its goal is to provide better prices to the farmers. After the amendment in the rules, the price and storage of agricultural products like cereals, edible oils, oilseeds, pulses, onions, and potatoes will not be regulated. These will be regulated only in exceptional circumstances like floods, drought, or national disaster.
FDI limit will be increased in defense production
The central government has said that the FDI limit in defense manufacturing will be increased from 49 to 74 percent through automatic routes. The Finance Minister announced this on Saturday. He emphasized on ‘Make in India’ to make the country self-sufficient in defense production. He also said that the central government will restrict the import of some defense equipment and platforms. For this, a list will be notified every year. Such equipment can only be purchased from within the country.
Read also: Economic activity allowed in the entire country except Containment Zone
Public Sector Enterprises Policy
The government has announced a Public Sector Enterprises Policy for a new and self-reliant India. The Finance Minister said that under this policy all sectors will be opened to the private sector. At the same time, the government will notify some sectors as a strategic sector. According to the Finance Minister, there will be at least one public sector company in the notified strategic sector. At the same time, it can have a maximum of four public sector companies. Private companies will also play their role in the strategic sector.
Increase in budget allocation for MNREGA
The central government has announced an increase of Rs 40,000 crore in the budget allocation for MNREGA. This will provide more work to migrant laborers returning to rural areas. The Finance Minister said that the move will strengthen the rural economy.