Finance minister Nirmala Sitharaman on Wednesday unveiled the details of the mega economic package aimed at uplifting the economy battered by the ongoing nationwide lockdown to combat the spread of the novel coronavirus.
In a big push to revive the economy, PM Modi announced a Rs 20 lakh crore economic package while addressing the nation on the coronavirus situation. The package combines the government’s recent announcements on supporting key sectors as also measures rolled out by the Reserve Bank of India (RBI).
Here are the key points of Sitharaman’s address:
The government announces Rs 3 lakh crore collateral-free loans for MSMEs, having a 4-year tenure and a moratorium of 12 months. These loans will be available till October 31, 2020, and will be 100 percent credit guaranteed. This will help 45 lakh units to resume activity and safeguard jobs.
To provide stressed MSMEs with equity support, the government will facilitate the provision of Rs 20,000 crore as subordinate debt.
MSMEs’ definition has been changed so that they need not worry about growing in size and still avail of the benefits.
The investment limit which defined an MSME has been revised upwards to Rs 1 crore as compared to Rs 25 lakh earlier.
Equity infusion of Rs 50,000 crore for MSMEs through fund of funds to be operated through a Mother Fund and few daughter funds. This will help to expand MSME size as well as capacity.
Global tenders will be disallowed in government procurement for tenders up to Rs 200 crore. This will make self-reliant India, will also then be able to serve ‘Make in India’.
Within the next 45 days, all MSME receivables will be cleared by CPSEs and the government of India.
Essentially the package is to spur growth and enhance demand and to create an atmanirbhar (self-reliant) India.
PM laid out a comprehensive vision, and that vision was laid out after wide consultations with several sections of the society.
Five pillars of a self-reliant India are Economy, infrastructure, system, demography, and demand.
The intention is to make local brands and take them to a global level.
Self-reliant India does not require India to be an isolationist country.
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