COVID-19 Economic Relief Package Announcements – Rs 20 Lakh Crore Support

Finance Minister Nirmala Sitharaman on Wednesday gave details of a Rs 20-trillion package to support an economy battered by a weeks-long lockdown to contain the coronavirus pandemic.

COVID-19 Economic Relief Package Announcements

Here are key highlights from what she said:

1. Tax-related measures

• Till March 31, 2021, TDS and TCS rates reduced by 25%
• This will release Rs 50,000 cr in the hands of people

2. Dates extended for direct taxes

• Vivaad se Vishvas: Whole scheme extended till December 31, 2020
• The due date for all I-T returns for 2019-20 extended to Nov 30, 2020
• Date of assessments getting barred as of March 31, 2021, is getting extended till September 30, 2021
• All pending refunds to charitable trusts, non-corporate businesses will be given immediately
• Date of assessments getting barred as on September 30, 2020, extended to December 31, 2020

3. Measures for Employees Provident Fund (EPF)

A liquidity relief is being given for all EPF establishments. Government support in the form of 12% employer and 12% employee contribution extended for another three months (June, July and August)

4. Measures for small businesses

Rs 3 trillion collateral-free automatic loans for Micro, Small and Medium Enterprises (MSME) in an economic package.

Definition of MSMEs has been revised. Investment limit that defined an MSME revised upwards to Rs Rs 1 crore from Rs 25 lakh. A company can be MSME if the turnover is up to Rs 5 crore now

5 Measures for contractors

1. All central govt agencies (railways, highways, PWD, etc) to give up to six-month extension to contractors
2. Extensions to cover goods and construction contracts
3. Concessional periods to also be extended by up to 6 months
4. Govt agencies to partially release bank guarantees to the extent of the partially complete contracts

6. Measures for real estate

1. The urban development ministry to issue advisory to states and UTs so that regulators consider the Covid-19 period an ‘act of god’
2. They will be able to extend all registered projects by up to 6 months
3. Using the force majeure clause suo motu they can extend registrations and completion dates if these were falling after March 25, 2020
4. Timelines under RERA to be extended

7. Measures for power Discoms

1. One-time emergency liquidity injection
2. Rs 90,000 crore infusion in Discoms by PFC and REC against their receivables
3. State to issue guarantees
4. Discoms to pay the gencos from the funds so generated
5. All those receiving money should pass on the benefits to consumers

8. ‘Self-reliant India’

1. “The package is essential to spur growth and help build a self-reliant India This whole initiative is called ‘Atma-Nirbhar Bharat Abhiyan’ (self-reliant India campaign),” says Finance Minister Sitharaman
2. “The initiative rests on five important pillars: economy, infra, tech-driven system, demography and demand. In this mission, our focus will be on land, labour, liquidity and law.”
3. “The intention is to build brands: picking local brands and taking it global. The idea is not to become self-exclusionist but to contribute to the world.”

Reference: Business Standard Newspaper.

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