Progress Report of Aatma Nirbhar Bharat Package

[CSLalit Rajput]

As on 12th July 2020

Ministry of Finance, vide press release id 1638112 dated 12th day of July, 2020 has issued a “Progress Report of Aatma Nirbhar Bharat Package” and Finance Minister Smt. Nirmala Sitharaman reviews implementation of Aatma Nirbhar Bharat Package pertaining to Ministries of Finance & Corporate Affairs.

Announcement made by Prime Minister Shri Narendra Modi:

Announcement of the Special economic and comprehensive package of ₹ 20 lakh crores - equivalent to 10% of India’s GDP – to fight COVID-19 pandemic in India on 12.05.2020.

• Progress reported so far:

1. MSME Reliefs: Global tenders will be disallowed in Government procurement tenders up to ₹ 200 crore, major relief to the local MSMEs.

2. Relief to Contractors: all central agencies like Railways, Ministry of Road Transport and Highways and CPWD will give extension of up to 6 months for completion of contractual obligations, including in respect of EPC and concession agreements.

3. Supporting State Governments: Centre has decided to accede to the request and increase borrowing limits of States from 3% to 5%, for 2020-21 only in view of the unprecedented situation. This will give States extra resources of ₹ 4.28 lakh crore.

Department of Expenditure issued a communication to all the State Governments for additional Borrowing of 2 per cent of projected GSDP to the States in 2020-21 subject to implementation of specific State Level Reforms.

4. Collateral-free Automatic Loans for Businesses:

• ₹ 3 lakh crore Collateral-free Automatic Loans for Businesses, including MSMEs
• additional working capital finance of 20% of the outstanding credit as on 29th February 2020
• Term Loan at a concessional rate of interest
• available to units with upto ₹ 25 crore outstanding and turnover of up to ₹ 100 crore whose accounts are standard.
• Department of Financial Services issued Operational Guidelines for the Scheme on 23.05.2020 and Emergency Credit Line Guarantee Scheme (ECLGS) Fund was registered on 26.05.2020

5. ₹ 45,000 crore Partial Credit Guarantee Scheme 2.0 for NBFCs

Existing Partial Credit Guarantee Scheme (PCGS) will be revamped and extended to cover the borrowings of lower rated NBFCs, HFCs and other Micro Finance Institutions (MFIs). Government of India will provide 20 per cent first loss sovereign guarantee to Public Sector Banks.

Banks have approved purchase of portfolio of ₹ 14,000 crore and are currently in process of approval/negotiations for ₹ 6,000 crore as on 3rd July 2020.

6. ₹ 30,000 crore Additional Emergency Working Capital Funding for farmers through NABARD

New front loaded special refinance facility of ₹ 30,000 crore sanctioned by NABARD during COVID-19 to RRBs & Cooperative Banks.

7. ₹ 50,000 crore liquidity through TDS/TCS rate reduction

The Department of Revenue announced the reduction in TDS rates for specified payments to residents and specified TCS rates by 25% for transactions made from 14th May, 2020 to 31st March, 2021.

8. Direct Tax Measures

• refunds in more than 20.44 lakh cases amounting to more than ₹ 62,361 crore
• the due date for income-tax return for FY 2019-20 (Assessment Year 2020-21)  has been extended from 31st July, 2020 (for individuals  etc.) and  31st October,2020 (for companies etc.) to 30th November, 2020.
• the due date for furnishing of tax audit report has also been extended from existing 30th September, 2020 to 31st October, 2020.
• the time barring date for assessments getting barred by limitation on 30th September, 2020 to 31st March, 2021
• the ‘Vivad se Vishwas’ Scheme will be extended to 31st December, 2020

9. Further enhancement of Ease of Doing business through IBC related measures

• MCA has raised the threshold of default under Section 4 of the IBC, 2016 to ₹ 1 crore (from the existing threshold of ₹ 1 lakh)
• a special insolvency resolution under section 240A of the Code, to provide relief to the MSMEs and the same would be notified soon.
• Insolvency and Bankruptcy Code (Amendment) Ordinance, 2020 has been promulgated on 5th June, 2020.

10. ₹ 30,000 crore Special Liquidity Scheme for NBFCs/HFCs/MFIs

Cabinet approved the Special Liquidity Scheme for NBFCs/HFCs. RBI has also issued a circular to NBFCs and HFCs on 1st July, 2020 itself on the Scheme.