Historically, India was often know as the "Golden Bird" which stands for the availability of raw materials such as availability of metals, stones, and spices. It has revived its history again.
Union Finance Minister Nirmala Sitharaman announced a few measures to help businesses, including micro, small and medium enterprises (MSMEs), recover from the economic impact of the coronavirus pandemic. This was a part of the ₹20lakh crore stimulus package announced by Prime Minister Narendra Modi a day before to spur growth and help build a self-reliant India.
To provide support to the struggling MSME sector, the government announced collateral-free automatic loans.
For small enterprises, the classification covers up to Rs 10 crore in investment and Rs 50 crore in turnover, against an investment of up to Rs 5 crore in manufacturing and up to Rs 2 crore in services.
For medium enterprises, the investment limit has been doubled for manufacturing enterprises from Rs 10 crore to Rs 20 crore and quadrupled for services from Rs 5 crore to Rs 20 crore.Banks are set to extend funds to lower-rated non-banking financial companies and housing finance companies following the government’s decision to offer credit guarantee support on Wednesday.
What MSME package means:The main thrust of Wednesday’s announcements was a relief to Medium, Small and Micro Enterprises (MSMEs) in the form of a massive increase in credit guarantees to them. There was, however, very little actual fiscal outgo that was announced. In other words, instead of directly infusing money into the economy or giving it directly to MSMEs in terms of a bailout package, the government has resorted to taking over the credit risk of MSMEs should they want to remain in business. Finance Minister Nirmala Sitharaman on Wednesday also announced a Rs 30,000 crore special liquidity scheme for non-banking financial institutions to provide credit support to the sector amid the coronavirus crisis.
Further, a Rs 45,000 crore partial credit guarantee scheme 2.0 was also unveiled for non-banking Financial companies (NBFCs), housing finance companies (HFCs), and microfinance institutions (MFIs) with low credit rating to help them extend loans to individuals and MSMEs.
For taxpayers, the government reduced the rates of Tax Deduction at Source (TDS) and Tax Collection at Source (TCS) by 25 percent, with effect from May 14, 2020, to March 21, 2021. It has extended the date for filing income tax returns to November 30, 2020, and tax audit to October 31, 2020. The EPF contribution was also reduced for businesses and workers for three months to 10 percent from 12 percent. As per the history of India, it has revived its self reliance or Make in India and Vande Bharat project, therefore not depending on other countries anymore. That marks the finish of dependency of India on other countries for resources.
Picture: Mr Modi went to Bangalore, Defense Research and Development Organization(DRDO). He went there to look for more innovations for stronger defense to become a self-reliant India or not become dependent on other countries for military weaponry.
Image credits: swarajyamag.com
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