Covid Reboot: Rs 50,000 Cr & Collateral Free Loans For SMEs: 15 Announcements By Finance Minister
Yesterday, PM Modi announced a mega economic stimulus of Rs 20 lakh crore to revive Indian economy, with stress on being self-reliant and self-sufficient.
This is roughly 10% of India’s GDP, and 2/3rd of India’s last budget.
Today, Finance Minister Nirmala Sethuraman provided more details on this economic stimulus and announced 15 major announcements.
Here are the highlights:
Rs 50,000 Crore Equity For MSMEs
Govt has announced a mega-corpus of Rs 50,000 crore for MSMEs, which are in need of cash infusion to sustain. It includes Rs 10,000 crore via mother-fund and daughter-fund framework.
Finance Minister said, “For MSMEs needing handholding, a Rs 50,000 crore ‘fund of funds’ through ‘mother fund – daughter fund’ framework is being created, to expand their capacity and to get listed on markets which they choose,”
Collateral Free Loan for SMEs
Govt will provide collateral-free loans worth Rs 10,000 crore for MSMEs who have more than Rs 25 crore outstanding loans or annual turnover of more than Rs 100 crore.
4-year tenure will be provided for repayment and interest moratorium of 10 months shall be given.
Besides, Rs 20,000 crore has been allocated for stressed SMEs via liquidity through subordinate debt-based scheme.
Govt Will Take Care Of PFs
Govt will now take care of the provident fund requirements of companies, which has less than 100 employees, earning less than Rs 15,000
New Definition of MSMEs
Infact, Govt has now changed the definition of SMEs, based on the capital and revenues per year.
Global Tenders Restricted
For Govt procurements upto Rs 200 crore, global tenders have been restricted now.
Total 15 Major Announcements Made
Overall, Govt has made 15 major announcements related to various sectors.
6 of them are for MSMEs
2 for Employee provident funds
2 for NBFCs
2 for MFIs
1 to discoms
1 to real estate
3 tax-related announcements
1 for contractors
This is a developing story. We will keep adding more info about the announcements as they are made.