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Finance Minister Nirmala Sitharaman announces measures
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Finance Minister Nirmala Sitharaman announces measures

MSME measures

1. Collateral free automatic loans. 4 year tenor with 12m moratorium. 100% credit guarantee on principal and interest - 3L Cr (60k Cr cover)
2. Subordinate Debt for stressed MSMEs (which are NPA or are stressed) - 20k Cr (4k Cr contribution of Govt to CGTMSE)
3. Fund of funds to be created for equity infusion (those which are viable) - 50k Cr
4. Definition of MSMEs being changed in favor of MSMEs. Limits on investments to be revised upwards. Additional criteria based on turnover also will be introduced. Differentiation between manufacturing and service units to be removed
Micro units - Investments upto 1 Cr + Turnover upto 5 Cr
Small units - 10 Cr + 50 Cr
Medium units - 20 Cr + 100 Cr

5. Government tenders upto 200 Cr will no longer be on global tender basis. Global tenders will be disallowed for upto 200 Cr. This will make MSMEs eligible to participate in Government purchases
6. Post Covid, e-market linkage to be provided for all MSMEs. Receivables by MSMEs from the Government will be cleared in next 45 days

EPF Measures

7. Liquidity relief for all EPF establishments (less than 100 employees with 90% drawing less than 15k). 12% of employer contribution and 12% employee contribution was borne by Government for March April and May. 3 months extra support to be provided by contributing total 24% for June July and August - 2.5k Cr
8. For other establishments, employers need to contribute 10% (vs 12% earlier) to EPF. Not applicable to Govt. and PSU enterprises - 6.75k Cr liquidity

NBFC Measures

9. 30k Cr liquidity scheme through Investment grade debt papers of NBFC, HFC and MFI fully guaranteed by GoI.
10. 45k Cr through partial credit guarantee scheme scope expansion. AA rated papers and below including unrated papers will be included under the scheme. First 20% loss to be borne by GoI.

Discoms measures

11. One time Emergency liquidity infusion - 90k Cr to all discoms against all receivables. Gen Cos should give rebates to discoms for passing on to consumers

Contractors

12. Ongoing public works - Concessional period to be extended by 3-6m for contractors. Govt agencies will partially release bank guarantees for partially completed contracts

Real Estate

13. Urban Development Ministry to issue advisories for regulators to announce Covid 19 can be used to invoke Force Majeure on contracts signed. All registrations registered after 25 March 2020 and contracts expiring after 25 March 2020 can be extended by 6m without specific applications for it

Tax Measures

14. TDS / TCS rates reduced by 25% on non salaried payments effective tomorrow upto 31 March 2021. Will apply to all payments - 50k Cr additional liquidity
15. All pending refunds to charitable trusts and non-corporate taxpayers (but including LLP) will be issued immediately
16. Due date for all income tax returns to be 30 November 2020 and tax audit due date to be 31 October 2020
17. Assessments getting barred on 30 September 2020 will get barred on 31 December 2020.
Cases getting barred on 31 March 2021 will get barred on 30 September 2021
18. Vivaad se Vishwaas scheme extended upto 31 December 2020 without any extra payments.




MSME measures 1. Collateral free automatic loans. 4 year tenor with 12m moratorium. 100% credit guarantee on principal and interest - 3L Cr (60k Cr cover) 2. Subordinate Debt for stressed MSMEs (which are NPA or are stressed) - 20k Cr (4k Cr contribution of Govt to CGTMSE) 3. Fund of funds to be created for equity infusion (those which are viable) - 50k Cr 4. Definition of MSMEs being changed in favor of MSMEs. Limits on investments to be revised upwards. Additional criteria based on turnover also will be introduced. Differentiation between manufacturing and service units to be removed Micro units - Investments upto 1 Cr + Turnover upto 5 Cr Small units - 10 Cr + 50 Cr Medium units - 20 Cr + 100 Cr 5. Government tenders upto 200 Cr will no longer be on global tender basis. Global tenders will be disallowed for upto 200 Cr. This will make MSMEs eligible to participate in Government purchases 6. Post Covid, e-market linkage to be provided for all MSMEs. Receivables by MSMEs from the Government will be cleared in next 45 days EPF Measures 7. Liquidity relief for all EPF establishments (less than 100 employees with 90% drawing less than 15k). 12% of employer contribution and 12% employee contribution was borne by Government for March April and May. 3 months extra support to be provided by contributing total 24% for June July and August - 2.5k Cr 8. For other establishments, employers need to contribute 10% (vs 12% earlier) to EPF. Not applicable to Govt. and PSU enterprises - 6.75k Cr liquidity NBFC Measures 9. 30k Cr liquidity scheme through Investment grade debt papers of NBFC, HFC and MFI fully guaranteed by GoI. 10. 45k Cr through partial credit guarantee scheme scope expansion. AA rated papers and below including unrated papers will be included under the scheme. First 20% loss to be borne by GoI. Discoms measures 11. One time Emergency liquidity infusion - 90k Cr to all discoms against all receivables. Gen Cos should give rebates to discoms for passing on to consumers Contractors 12. Ongoing public works - Concessional period to be extended by 3-6m for contractors. Govt agencies will partially release bank guarantees for partially completed contracts Real Estate 13. Urban Development Ministry to issue advisories for regulators to announce Covid 19 can be used to invoke Force Majeure on contracts signed. All registrations registered after 25 March 2020 and contracts expiring after 25 March 2020 can be extended by 6m without specific applications for it Tax Measures 14. TDS / TCS rates reduced by 25% on non salaried payments effective tomorrow upto 31 March 2021. Will apply to all payments - 50k Cr additional liquidity 15. All pending refunds to charitable trusts and non-corporate taxpayers (but including LLP) will be issued immediately 16. Due date for all income tax returns to be 30 November 2020 and tax audit due date to be 31 October 2020 17. Assessments getting barred on 30 September 2020 will get barred on 31 December 2020. Cases getting barred on 31 March 2021 will get barred on 30 September 2021 18. Vivaad se Vishwaas scheme extended upto 31 December 2020 without any extra payments. Click here to access the Atma Nirbhar presentation by the FM, Nirmala Sitharaman, presented on 13th May 2020Also read:https://www.constructionworld.in/Latest-Updates-On-Construction-Companies/Dear-Finance-Minister/23540https://www.constructionworld.in/Latest-Updates-On-Construction-Companies/An-Open-Letter--to-Finance-Minister/23378https://www.constructionworld.in/Latest-Updates-On-Construction-Companies/FM-announces-Construction-Workers-Fund/23377

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