15 new, enhanced measures to revive economy; big takeaways for MSMEs (Ld)
New Delhi, May 13 (IANS) Finance Minister Nirmala Sitharaman on Wednesday announced 15 new and some enhanced measures to revive and support businesses, and workers under the mega stimulus package — Self-Reliant India Movement — which was announced by Prime Minister Narendra Modi last evening.
Accordingly, the Minister announced a slew of fiscal and regulatory measures for MSMEs, real estate, NBFCs, power distribution and general businesses.
Attempts have also been made via these measures to decrease the regulatory burden on companies, while increasing the take-home pay of employees.
But the big takeaways were for the MSME sector which is considered the backbone of economic activity.
In terms of measures, the Centre has decided to give a new definition to MSMEs. This will denote the type of companies that will be included in the sector.
Accordingly, the investment limit for defining MSMEs has been revised upwards.
Besides, she highlighted that additional criteria such as turnover has been considered for defining MSMEs.
In terms of fiscal measures, the FM announced that Rs 3 lakh crore “Collateral-free Automatic Loans” for businesses, including MSMEs will be provided to meet operational liabilities built up, buy raw material and restart business
The minister further announced another scheme worth Rs 20,000 crore for “Subordinate Debt for Stressed MSMEs”.
A Rs 50,000-crore “Fund of Funds” for MEMEs which face severe shortage of equity was also announced.
The Centre has also decided not to go in for global bidding for government procurement for tenders up to Rs 200 crore, thereby, promoting the participation of MSMEs, she said.
Furthermore, e-market linkage for MSMEs will be provided and that CPSEs will pay all receivables to MSMEs within 45 days.
Besides, a Rs 30,000-crore special liquidity scheme for non-banking finance companies (NBFCs), housing finance companies (HFCs) and micro-finance institutions (MFIs) was announced.
This scheme will provide investments in both primary and secondary market transactions in ‘investment grade debt paper of these institutions’.
The minister said that the scheme will support the previous initiatives of the government and the central bank to boost liquidity.
The securities under the scheme will be fully guaranteed by the Central government.
Further, the FM has also announced Rs 45,000-crore partial credit guarantee scheme for NBFCs.
Under the scheme, first 20 per cent loss will be borne by Cenre, and even unrated papers will be eligible for investment, enabling NBFCs to reach out even to MSMEs in far-flung areas.
Additionally, a Rs 90,000-crore liquidity injection plan was announced for the financially stressed power distribution companies.
This plan will allow these entities to clear their dues towards power generation companies.
As per the plan, the liquidity window for discoms was essential as their revenue has plummeted and they are in the midst of unprecedented cash flow problem accentuated by demand reduction during the current lockdown.
The scheme will allow power sector financiers — PFC and REC — to infuse liquidity of Rs 90,000 crore to DISCOMs against receivables.
Loans will be extended against State guarantees for exclusive purpose of discharging liabilities of Discoms to Gencos.
The announcements were made a day after Prime Minister Narendra Modi announced a mega stimulus package which will take the total amount announced by the Ministry of Finance and the RBI to a total of Rs 20 lakh crore or 10 per cent of the GDP.
–IANS
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