FM Nirmala Sitharaman announces details of the Rs 20 lakh crore economic package for MSMEs

The prime minister, yesterday, laid out a comprehensive vision for the nation post COVID-19. Today, FM Nirmala Sitharaman announced the details of the Rs 20 lakh crore economic package under the "Atmanirbhar Bharat Abhiyaan". She said that 'Atmanirbharta' doesn't imply isolationism, rather it is becoming confident and self-reliant. Further, the Centre will use this economic stimulus package to spur growth and create a self-reliant India.

Sitharaman, further, reminded of the several schemes over the past few years that have benefited the poor. PSB cleaned up and we saw the impact of lockdown on businesses due to GST reforms. Government has extended a relief package worth Rs 1.7 lakh crore under PMGKY to help the poor fight coronavirus. The multi-faceted yojana has provided insurance cover of Rs 50 lakh to every health worker.

She emphasized that local brands will help Indian a resilient global supply chain globally. She said:

This economic package will be a part of PM's five key pillars policy- economy, infrastructure, technology-based system, demography and demand. Today, she will announce 15 measures for various economic sectors including MSMEs, discoms, real estate. More will cover over the coming weeks.

There are 6 new reform for the MSMEs

1. In a major initiative, Government announces Rs 3 lakh crores Collateral-free Automatic Loans for Businesses, including MSMEs. The details of the scheme are:

2. To provide stressed MSMEs with equity support, the Government will facilitate the provision of Rs. 20,000 cr as subordinate debt.

3. Rs 50,000 cr. Equity infusion 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.

4. Definition of MSMEs gets a revision, Investment limit to be revised upwards, additional criteria of turnover also being introduced.

Further, the new definition of MSMEs will be:

5. Unfair competition from foreign companies will become a thing of the past. Global tenders to be disallowed in Government procurement upto Rs 200 crores.

6. To ease financial stress as businesses get back to work, Government decides to continue EPF Support for Business & Workers for 3 more months providing a liquidity relief of Rs 2,500 crore.

The FM, Nirmala Sitharaman along with Minister of State Anurag Thakur will give more details on other sectors like NBFCs, Real estates and Discoms.