Bengaluru, NFAPost: The Narendra Modi-led government’s Special economic and comprehensive package of Rs. 20 lakh crores to fight Covid-19 pandemic in India has already disbursed Rs 1,20,099.39 crore via various banks.
In a review meeting organised by the Finance Ministry on PM’s Aatma Nirbhar Bharat or Self-Reliant India Movement announced on May 12th, Finance Minister Nirmala Sitharaman said the government initiative succeeded in providing relief to the MSME businesses by way of giving additional working capital finance of 20% of the outstanding credit as on 29th February 2020.
“After taking Cabinet approval on 20.05.2020, Department of Financial Services issued Operational Guidelines for the Scheme on 23.05.2020 and Emergency Credit Line Guarantee Scheme (ECLGS) Fund was registered on 26.05.2020. In a short period of about one and half months noticeable progress has been achieved in identifying units, sanctioning as well as disbursing of loans to MSMEs. Following is the progress as on 9th July 2020,” said Finance Minister Nirmala Sitharaman.
Term loan with concessional rate
The credit relief is given in the form of a Term Loan at a concessional rate of interest. This will be available to units with upto Rs. 25 crore outstanding and turnover of up to Rs. 100 crore whose accounts are standard.
“The units will not have to provide any guarantee or collateral of their own. The amount will be 100% guaranteed by the Government of India providing a total liquidity of Rs. 3 lakh crore to more than 45 lakh MSMEs,” said Finance Minister Nirmala Sitharaman.
In an effort to support the financial position of the State Governments presently suffering from stress on account of revenue losses due to lock down, Department of Expenditure issued a communication to all the State Governments for additional borrowing of 2% of projected GSDP to the States in 2020-21 subject to implementation of specific State Level Reforms.
Borrowing limit of states
The Centre has decided to accede to the request and increase borrowing limits of States from 3% to 5%, for 2020-21 only in view of the unprecedented situation. This will give States extra resources of Rs. 4.28 lakh crore,” said the Finance Minister.
As part of Aatma Nirbhar Bharat Package, between April 8 and June 30, the Central Board of Direct taxes (CBDT) has issued refunds in more than 20.44 lakh cases amounting to more than Rs. 62,361 crore.
Finance Minister Nirmal Sithraman said remaining refunds are under process so that citizen will get relief to wade through this challenging time.
“The Department also issued Notification dated 24.6.2020, the due date for income tax return for FY 2019-20 (Assessment Year 2020-21) has been extended from 31th July, 2020 (for individuals etc.) and 31st October,2020 (for companies etc.) to 30th November. Further, the due date for furnishing of tax audit report has also been extended from existing 30th September, 2020 to 31st October, 2020,” said Nirmala Sitharaman.
Ease of doing business
In a move to further enhance ease of doing business through IBC related measures, the Ministry of Corporate Affairs has raised the threshold of default under Section 4 of the IBC, 2016 to Rs 1 crore (from the existing threshold of Rs 1 lakh) i.e. “in exercise of powers conferred under Section 4 of Insolvency & Bankruptcy Code, 2016 (31 of 2016), the Central Government hereby specified Rs 1 crore as the minimum amount of default for the purposes of the said section” vide Notification dated 24.6.2020.
The Ministry of Corporate Affairs is finalising a special insolvency resolution under section 240A of the Code, to provide relief to the MSMEs and the same would be notified soon.
Insolvency and Bankruptcy Code (Amendment) Ordinance, 2020 has been promulgated on 5th June, 2020 thereby provided for insertion of Section 10A in the Insolvency and Bankruptcy Code 2016 to temporarily suspend initiation of Corporate Insolvency Resolution Process (CIRP) under Section 7, 9 & 10 of the Code for a period of six months or such further period, not exceeding one year from such date.