Finance Minister Smt. Nirmala Sitharaman reviews implementation of Aatma Nirbhar Bharat Package pertaining to Ministries of Finance & Corporate Affairs Posted On: 12 JUL 2020 11:51AM by PIB Delhi

Hon’ble Prime Minister Shri Narendra Modi on May 12th, 2020, announced the Special economic and comprehensive package of Rs. 20 lakh crores - equivalent to 10% of India’s GDP – to fight COVID-19 pandemic in India. He gave a clarion call for Aatma Nirbhar Bharat or Self-Reliant India Movement. He also outlined five pillars of Aatma Nirbhar Bharat – Economy, Infrastructure, System, Vibrant Demography and Demand.

Following the call of the Hon'ble Prime Minister, Minister for Finance & Corporate Affairs Smt. Nirmala Sitharaman laid down the details of the Aatma Nirbhar Bharat Package in a string of press conferences from 13th May to 17th May 2020.

The Ministries of Finance & Corporate Affairs have immediately started implementation of the announcements related to the Economic Package under Aatma Nirbhar Bharat Abhiyaan. Regular reviews and monitoring of the implementation of economic package is being overseen by the Finance Minister personally.

In the latest review taken by Smt Nirmala Sitharaman the following progress has been reported so far: Global tenders will be disallowed in Government procurement tenders up to Rs 200 crore

Giving a major relief to the local MSMEs, Department of Expenditure has amended present Rule 161 (iv) of General Financial Rules, 2017 and GFR Rules relating to Global Tenders. Now, no Global Tender Enquiry (GTE) shall be invited for tenders upto Rs. 200 crore, unless prior approval is obtained from Cabinet Secretariat.

Relief to Contractors It was announced by the Finance Minister that all central agencies like Railways, Ministry of Road Transport and Highways and CPWD will give extension of up to 6 months for completion of contractual obligations, including in respect of EPC and concession agreements.

In this regard, Department of Expenditure has issued instructions that (due to COVID-19 pandemic) on the invocation of Force Majeure Clause (FMC), contract period may be extended for a period not less than three months and not more than six months without imposition of any cost or penalty on the contractor/concessionaire. Instructions were also issued to return the value of performance security to the contractor/ suppliers proportional to the supplies made/ contract work completed to the total contract value. The same is being implemented by various Departments/Ministries.

Supporting State Governments The Finance Minister announced that 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.

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 per cent of projected GSDP to the States in 2020-21 subject to implementation of specific State Level Reforms.

Rs 3 lakh crore Collateral-free Automatic Loans for Businesses, including MSMEs To provide relief to the business, additional working capital finance of 20% of the outstanding credit as on 29th February 2020, in the form of a Term Loan at a concessional rate of interest will be provided. 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.

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:

Rs 45,000 crore Partial Credit Guarantee Scheme 2.0 for NBFCs Existing Partial Credit Guarantee Scheme (PCGS) will be revamped and extended to cover the borrowings of lower rated NBFCs, HFCs and other Micro Finance Institutions (MFIs). Government of India will provide 20 per cent first loss sovereign guarantee to Public Sector Banks.

After the Cabinet approval on PCGS on 20.05.2020, Operational Guidelines for the Scheme were issued on 20.05.2020 itself. Banks have approved purchase of portfolio of Rs. 14,000 crore and are currently in process of approval/negotiations for Rs. 6,000 crore as on 3rd July 2020.

Rs 30,000 crore Additional Emergency Working Capital Funding for farmers through NABARD New front loaded special refinance facility of Rs. 30,000 crore sanctioned by NABARD during COVID-19 to RRBs & Cooperative Banks. This special facility to benefit 3 crore farmers, consisting mostly small and marginal farmers in meeting their credit needs for post-harvest and kharif sowing requirements. When kharif sowing is already on its full swing Rs. 24,876.87 crore out of Rs. 30,000 crore has been disbursed as on 06.07.2020, out of this special facility.

Rs 50,000 crore liquidity through TDS/TCS rate reduction The Department of Revenue, vide its Press Release dated 13.05.2020, announced the reduction in TDS rates for specified payments to residents and specified TCS rates by 25% for transactions made from 14th May, 2020 to 31st March, 2021.

Other Direct Tax Measures 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, as stated in press release dated July 3, 2020. Remaining refunds are under process. 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 31st July, 2020 (for individuals etc.) and 31st October,2020 (for companies etc.) to 30th November, 2020. Further, the due date for furnishing of tax audit report has also been extended from existing 30th September, 2020 to 31st October, 2020.

The Department of Revenue has extended the time barring date for assessments getting barred by limitation on 30th September, 2020 to 31st March, 2021. In this regard, through the Press Release dated 24.6.2020, it has been already been communicated that making payment without additional amount under the ‘Vivad se Vishwas’ Scheme will be extended to 31st December, 2020 and the legislative amendments for the same in the Vivad Se Vishwas Act, 2020 (VsV Act) shall be moved in due course to time. Further, through the Notifications, compliance dates mentioned under the VsV Act falling during period 20th March, 2020 to 30th December, 2020 have been extended to 31st December, 2020.

Further enhancement of 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.

Rs 30,000 crore Special Liquidity Scheme for NBFCs/HFCs/MFIs

After the Cabinet approval of the Special Liquidity Scheme for NBFCs/HFCs, the Scheme has been launched. RBI has also issued a circular to NBFCs and HFCs on 1st July, 2020 itself on the Scheme. SBICAP has received 24 applications requesting about Rs. 9,875 crore of financing as on 7th July, 2020 which are being processed. The first application in this regard has received its approval and the remaining are also being considered.

Minister of Petroleum and Natural Gas & Steel Shri Dharmendra Pradhan has appealed to the Indian students from various top global universities to come and innovate in India, to explore the emerging opportunities. He was interacting with a vibrant group of young overseas Indian scholars, students and friends, yesterday on last-mile energy access in India. The e-meet was organised by Lead India group of Princeton University, Think India Purdue, Develop Empower & Synergize India group at University of Maryland.

Articulating India’s energy vision, Shri Pradhan said, “Hon’ble Prime Minister Modi has envisioned a clear roadmap for India’s energy future which rests on five key enablers of energy availability and accessibility for all, energy affordability to the poorest of the poor, efficiency in energy use, energy sustainability for combating climate change as a responsible global citizen and energy security for mitigating global uncertainties.”

Speaking about Pradhan Mantri Ujjwala Yojana, Minister Pradhan said, “We introduced the Pradhan Mantri Ujjwala Yojana(PMUY) scheme, in 2016. Its objective is to provide LPG cooking gas connections, free of cost to 80 million poor households. I am happy to inform you that we could achieve the target of 80 million customers well ahead of schedule. With this, LPG connections are now available to 98% of the households in India, up from just about 56% in the year 2014.”

About self-reliance in oil and gas sector, Shri Pradhan said, “PM Modi has set a target for reduction of 10 percent in energy import dependency by 2022. In this regard, the government has taken several policy as well as administrative measures to augment domestic oil and gas production and reduce dependency on imports for meeting the energy requirements of the country.”

He also talked about India’s energy diplomacy and said, “India has made its presence felt in the global energy map. India under leadership of PM Modi is leading the voice of consuming countries demanding for reasonable and affordable price of energy. We are engaging with OPEC, IEA, IEF and all other major voices in the world energy discussions. India has engaged with the US, Russia, Saudi Arabia, the UAE and all major energy producers, under a policy of diversification of supply sources.”

Speaking about India’s transition to gas-based economy, he said, “India is set to emerge as one of the primary drivers of growth in gas demand in Asia, despite the pressing Covid-19 challenges. Today, share of natural gas in India’s energy mix is about 6.3%. We have taken an ambitious target to increase the share of natural gas to 15% by 2030.”

On the current pandemic, Shri Pradhan said, "We are in the midst of an outbreak of the Covid-19 pandemic that challenges the fundamental assumptions of our lives. While the immediate economic impact may slow us down, we are presented with an opportunity to pause, rethink, and redesign.”

Dwelling upon the economic package announced during the pandemic, he said, “Prime Minister Modi has announced a massive stimulus package of $ 265 billion - accounting for 10% of India’s GDP, to deal with the impact of the Covid-19 pandemic. Major reforms were announced for a self-reliant India that seek to convert Covid-19 challenges into an opportunity, and for becoming global manufacturing hub of the 21st century. Energy infrastructure is an integral component of these reforms.”