Prime Minister Narendra Modi said today that Finance Minister Nirmala Sitharaman's announcements would go a long way in addressing issues faced by businesses, especially Micro, Small and Medium Enterprises (MSMEs) hit by the coronavirus crisis and the weeks-long lockdown.
"Today's announcements by the Finance Minister will go a long way in addressing issues faced by businesses, especially MSMEs. The steps announced will boost liquidity, empower the entrepreneurs and strengthen their competitive spirit," the Prime Minister tweeted.
Thanking the PM, Ms Sitharaman responded late Wednesday evening by saying under his guidance, the government is laying out the blueprint of his vision for a self-reliant India.
Under your guidance, we are laying out the blue print of your vision for an #AatmanirbharBharat. In the first tranche, we spoke about the MSMEs and the NBFCs. Thank you @PMOIndiahttps://t.co/MwcdeBG8U5— Nirmala Sitharaman (@nsitharaman) May 13, 2020
Ms Sitharaman said the government would offer collateral-free bank loans amounting to Rs 3 lakh crore to small businesses as part of measures to combat the damage caused by the coronavirus outbreak.
The allocation is part of a Rs 20 lakh crore fiscal and monetary package announced by PM Modi in a televised address to the nation yesterday.
The government will also cut the tax rate for non-salary payments and provided liquidity to non-banking companies to help them tide over the virus lockdown. Also, dates for filing income tax returns and other assessments have been extended.
The Finance Minister said the rate of tax deducted at source (TDS) and tax collected at source (TCS) for non-salaried payments up to March 31, 2021, would be cut by 25 per cent.
The government has also extended by three months its financial support to companies with less than 100 employees to meet retirement fund obligations.
For all companies, the statutory obligation to pay 12 per cent of basic salary as employer's share to employee provident fund (EPF) contribution has been reduced to 10 per cent to boost their liquidity.
Only Indian companies to be allowed in government tenders up to Rs 200 crore.