FM Announces Rs 3 Lakh Crore Collateral-Free Loans For MSMEs

NEW DELHI: Union Finance Minister Nirmala Sitharaman on Wednesday announced collateral-free loans worth Rs 3 lakh crore for MSMEs with turnover upto Rs 100 crore till October 31, 2020. While addressing the media she shared details of the fiscal and monetary measures worth Rs 20 lakh crore announced by Prime Minister Narendra Modi on Tuesday, to tackle the impact of coronavirus and weeks of lockdown on the economy.

Here are the highlights: * Ministries held detailed talks with industries and PM's Office on economic package * The "Atma Nirbhar Bharat Abhiyan" initiative to spur growth and help in building self-reliant India * Plan based on five important pillars: economy, infrastructure, tech-driven systems, demography and demand * Prime Minister has laid out a comprehensive vision, which is based on wide and deep consultations with several sections of society * Focus to be on factors of production - land, labour, liquidity and law * Local brands to be brought to global level * Focus will be on nurturing local brands as part of this mission * Global value chain integration part of PM's plan * We have capability to build such enterprises * All schemes rolled out by government since it came to power are driven by reforms * Direct Benefit Transfer (DBT) scheme helped government deliver money directly to Jan Dhan accounts of the poor * Rs 52,606 crore transferred to 41 crore Jan Dhan account holders under PM Garib Kalyan scheme * Beginning today, I will lay out details of PM's Vision over next few days * Refunds of Rs 18,000 crore made to income tax assessees, 40 lakh taxpayers benefitted * Government to announce 15 different measures * 4-year collateral-free loans to be 100% credit-free, with a moratorium for first 12 months * Definition of MSMEs being changed * Company with an investment of Rs 1 crore, turnover of Rs 5 crore is a micro-enterprise under new definition; one with Rs 10 crore investment, turnover of Rs 50 crore a small enterprise; one with Rs 20 crore investment, Rs 100 crore turnover a medium enterprise * No global tender for government procurement up to Rs 200 crore * EPF support of Rs 2,500 crore for businesses, workers for a period of three months (government to pay employee, employer contribution to EPF accounts) Support towards months March, April, May already announced earlier as part of PM Garib Kalyan scheme; that scheme being extended for another three months (June-August).

* EPF contribution to be reduced for businesses, workers for 3 months to 10% from 12%, stay at 12% for state-run firms

*Rs 30,000 crore liquidity push for non-banking financial companies (NBFC), housing finance companies (HFC), microfinance institutions (MFI)

*Rs 90,000 crore liquidity for power distribution companies

* Six-month extension for government contractors; builders get more time to finish projects

Also Read: India’s Rs 20 Lakh Crore Economic Package Is Striking!