Cabinet DecisionsCOVID 19Legislation Updates

Union Cabinet, has given its approval to the proposal of the Ministry of Finance to launch

a new Special Liquidity Scheme for Non-Banking Financial Companies (NBFCs) and Housing Finance Companies (HFCs) to improve liquidity position of the NBFCs/HFCs.

Financial implication:

The direct financial implication for the Government is Rs. 5 crore, which may be the equity contribution to the Special Purpose Vehicle (SPV). Beyond that, there is no financial implication for the Government until the Guarantee involved is invoked. However, on invocation, the extent of Government liability would be equal to the amount of default subject to the Guarantee ceiling. The ceiling of aggregate guarantee has been set at Rs. 30,000 crore, to be extended by the amount required as per the need.

Details of the Scheme:

The Government has proposed a framework for addressing the liquidity constraints of Non-Banking Financial Companies (NBFCs) and Housing Finance Companies (HFCs) through a Special Liquidity Scheme. An SPV would be set up to manage a Stressed Asset Fund (SAF) whose special securities would be guaranteed by the Government of India and purchased by the Reserve Bank of India (RBI) only. The proceeds of sale of such securities would be used by the SPV to acquire short-term debt of NBFCs/HFCs. The Scheme will be administered by the Department of Financial Services, which will issue the detailed guidelines.

Implementation schedule:

A large public sector bank would set up an SPV to manage a stressed asset fund which would issue interest bearing special securities guaranteed by the Government of India, to be purchased by RBI only. The SPV would issue securities as per requirement subject to the total amount of securities outstanding not exceeding Rs. 30,000 crore to be extended by the amount required as per the need. The securities issued by the SPV would be purchased by RBI and proceeds thereof would be used by the SPV to acquire the debt of at least investment grade of short duration (residual maturity of upto 3 months) of eligible NBFCs / HFCs.

Impact:

Unlike the Partial Credit Guarantee Scheme which involves multiple bilateral deals between various public sector banks and NBFCs, requires NBFCs to liquidate their current asset portfolio and involves flow of funds from public sector banks, the proposed scheme would be a one-stop arrangement between the SPV and the NBFCs without having to liquidate their current asset portfolio. The scheme would also act as an enabler for the NBFC to get investment grade or better rating for bonds issued. The scheme is likely to be easier to operate and also augment the flow of funds from the non-bank sector.

Benefits:

It has been announced in the Budget Speech of 2020-21 that a mechanism would be devised to provide additional liquidity facility to NBFCs/HFCs over that provided through the PCGS. This facility would supplement the liquidity measures taken so far by the Government and RBI. The Scheme would benefit the real economy by augmenting the lending resources of NBFCs/HFCs/MFls.

Background:

It has been announced in the Budget Speech of 2020-21 that a mechanism would be devised to provide additional liquidity facility to NBFCs/HFCs over that provided through the Partial Credit Guarantee Scheme (PCGS).  There is an urgency to implement the above Budget announcement to strengthen financial stability on account of the emerging situation of Covid-19.


Cabinet

[Press Release dt. 21-05-2020]

[Source:PIB]

COVID 19Hot Off The PressNews

LIVE UPDATES [17th May, 2020]:

  • Focus: MNREGA, Health, education, Business, De-Criminalisation of Co. Act, Ease of Doing Business, State Governments, Public Sector Enterprises.
  • MGNREGA: Additional 40,000 Crore for the scheme
  • Ramping up the health infrastructure: Districts to have Infectious Diseases Blocks; More Testing Labs (Both Pvt. & Public)
  • PM E-Vidya Program to be launched; One Nation One Digital Platform; One Class One Channel
  • Debts related to pandemic, shall not be included in the category of default; No fresh Insolvency proceedings upto 1 Year; For MSMEs — A special insolvency framework will be notified under S. 240-A of IBC
  • Decriminalised most of the Technical Defaults under Companies Act
  • Decriminalisation of Companies Act defaults; 7 compoundable offences altogether dropped and 5 to be dealt with under alternative framework. The amendment will de-clog the criminal courts and NCLT
  • Now, Indian public companies can list their securities directly in foreign jurisdictions. Private companies which list Non Convertible Debentures on stock exchanges will not be regarded as listed companies:
  • All sectors allowed and opened for Private Companies
  • Govt to announce a new public sector policy- a list of strategic sectors requiring presence of PSEs in public interest will be notified. In strategic sectors, at least 1 enterprise to remain in public sector but private sector to be allowed. In other sectors, PSEs to privatised
  • Borrowing Limiting for States increased to 5%; Centre has decided to increase borrowing limits of states from 3 per cent to 5 per cent of Gross State Domestic Product (GSDP) for 2020-21.
  • Overall stimulus package under the Atmanirbhar (self-reliant) Bharat amounts to Rs 20,97,053: Finance Minister Nirmala Sitharaman [ANI]

Breakup of the 20 Lakh Crore Package [PART WISE]

  • Emergency W/C Facility for Businesses, incl MSMEs — 3,00,000 Cr
  • Subordinate Debt for Stressed MSMEs — 20,000 Cr
  • Fund of Funds for MSMEs — 50,000 Cr
  • EPF Support for Business and Workers — 2800 Cr
  • Reduction in EPF Rates — 6750 Cr
  • Special Liquidity scheme for NBFC/HFC/MFIs — 30,000 Cr
  • Partial credit guarantee Scheme 2.9 for Liabilities of NBFCs/MFIs — 30,000 Cr
  • Liquidity Injection for DISCOMs — 90,000 Cr
  • Reduction in TDS/TCS Rates — 50,000 Cr

TOTAL: 5,94,550 CRORE

  • Free Food Grain supply to migrant workers for 2 months – 3500 Cr
  • Interest Subvention for MUDRA Shishu Loans — 1500 Cr
  • Special Credit Facility to Street Vendors — 5000 Cr
  • Housing CLSS-MIG — 70,000 Cr
  • Additional Emergency Working Capital through NABARD — 30,000 Cr
  • Additional credit through KCC — 2,00,000 Cr

TOTAL: 3,10,000 CRORE

  • Food Micro Enterprises — 10,000 Cr
  • Pradhan Mantri Matsya Sampada Yojana — 20,000 Cr
  • TOP to TOTAL: Operation Greens — 500 Cr
  • Agri Infrastructure Fund — 1,00,000
  • Animal Husbandry Infrastructure Development Fund — 15,000
  • Promotion of Herbal Cultivation — 4,000 Cr
  • Beekeeping Initiative — 500 Cr

TOTAL: 1,50,000 CRORE

  • Viability Gap Funding — 8,100 Cr
  • Additional MGNREGS allocation — 40,000 Cr

TOTAL: 48,100 CRORE

Read below the reliefs offered by the Finance Minister, with the focus being MSMEs:

LIVE UPDATES [14-05-2020] 

  • Focal point: Liquidity, Labour, Law and Land.
  • 6 Major steps for MSMEs
  • Collateral free Automatic Loans upto Rs 3 lakh Crores
  • 100 % credit guarantee
  • Additional Funds for MSME revival
  • Loans to be given till October 31st
  • Rupees 20 Crore for stressed MSMEs
  • 50,000 Crore equity to be infused for viable and potential MSMEs
  • New Definition of MSMEs — Investment can be upto 1 Cr and turnover upto 5 Crore
  • Global tender to be allowed upto Rs 20 Crores
  • Other interventions for MSMEs
  • Rs 2500 crores EPF support for businesses and Workers for 3 months
  • EPF contribution reduced for Business and Workers for 3 months — Rs 6750 Crores
  • Rs 30,000 crores liquidity facility for NBFC/HCs/MFIs
  • Rs 45,000 Crores Partial Credit Guarantee Scheme 2.0 for NBFC
  • Rs 90,000 CR liquidity injection for DISCOMs
  • Relief to contractors
  • Extension of registration and completion date of real estate projects under RERA; No individual applications needed; Suo Moto be done; Registered projects expiring on or after 25th March
  • Rs 50,000 crores Liquidity through TDS/TCS reductions till March 2021
  • Tax filing due date extended to 30th November, 2020
  • Pending refunds to charitable trusts and non-corporate businesses & professions including proprietorship, partnership, LLP and Co-operatives shall be issued immediately.
  • Due date of all income tax return for FY2019-20 extended from 31st July, 2020 & 31st October, 2020 to 30th November, 2020 and Tax audit from 30th September, 2020 to 31st October, 2020.
  • Date of Assessments getting barred on 30th September, 2020 extended to 31st December, 2020 and those getting barred on 31st March, 2021 will be extended to 30th September, 2021.
  • Period of Vivad se Vishwas Scheme for making payment without additional amount will be extended to 31st December, 2020

LIVE UPDATES [15-05-2020]:

  • FOCUS: Migrant Workers, Street vendors, Small Farmer, Self Employed, Traders, etc.
  • 9 Steps will be announced.
  • 14.62 crore person-days of work generated till 13th May 2020
  • 10,000 crore actual expenditure till date
  • National Floor Wage to be introduced
  • Re-skilling of workers
  • Universal minimum wages

Reliefs

  • Free food grain supply to all migrants for next 2 months [For non-card holders: 5 kgs of wheat or rice or 1 kg of chana]; State Governments to implement, Centre to borne costs
  • One Nation One Ration card to be implemented within 3 months
  • Affordable rented accommodation for migrants; Rental Housing Scheme;Migrant Workers / Urban Poor to have Affordable Rental Housing Complexes (ARHC): Government will launch a scheme under
  • Mudra Shishu Loans: Government of India will provide Interest subvention of 2% for prompt  MUDRA– Shishu Loans payees for a period of 12 months; Relief of Rs 1500 cr to MUDRA-Shishu loanees
  • Special Credit facility for Street Vendors: Easy access to credit; Rs 5000 cr Special Credit Facility
  • Middle Income Group with upto 6 to 18 lakh income group: Credit link subsidy scheme for housing to be extended till March 2021; 2.5 lakhs middle income families to benefit during 2020-21
  • To create job opportunities for Tribals /Adivasis-Plans worth Rs 6000 crores to be approved shortly under Compensatory Afforestation Management & Planning Authority (CAMPA) Funds
  • Rs 30,000 Crore additional emergency working capital fund through NABARD
  • Kisan Credit Card: 2 lakh Crore concessional credit for farmers; 2 lakh crore Concessional credit boost to 2.5 crore farmers through KisanCreditCards; Fishermen and Animal Husbandry farmers will also be included in this drive

Live Updates [16-05-2020]

  • Focal Point: Agriculture
  • One lakh Crore for — Strengthening Farming Infrastructure; Cold Storage, Grain Storage, etc.; Funding Agriculture Infrastructure Projects at farm-gate & aggregate points.
  • Rs 10, 000 Crore for boosting local products for Global sale;Vocal for Local with Global outreach; Formalisation of Micro Food Enterprises
  • Rs 20,000 crores for Fishermen through Pradhan Mantri Sampada Yojana
  • 100% vaccination of livestock;National Animal Disease Control Programme launched
  • Animal  Husbandry infrastructure fund — Rs, 15,000 Crores
  • Rs 4000 Crores to promote herbal cultivation in India that aims to cover 10 lakh hectare under herbal cultivation in 2 years; Corridor of medical plants to come up across banks of Ganga
  • Rs 500 Crores for Beekeeping initiatives
  • 500 crore for improving supply chain of fruits, vegetables, etc.;Govt. extends Operation Greens from Tomatoes, Onion and Potatoes to all fruits and vegetables
  • Amendment to Essential Commodities Act
  • Farmers & Farmers getting adequate choice to sell their produce at attractive price: Central Law to be introduced;
  • Law to implement agriculture marketing reforms to provide marketing choices to farmers; law will provide adequate choices to farmer to sell produce attractive price.

LIVE UPDATES [16-05-2020]:

  • Focal Point: Structural Reforms
  • Reforms 8 Sectors: Coal, Minerals, Defence Production, Airspace Management, MRO, Distribution Companies in UTs, Space Sector, Atomic Energy
  • Coal: Commercial Mining of Coal on a revenue sharing basis; Liberalised Entry for people, Incentives for those who produce before the deadline; 50,000 Crore for coal evacuation infrastructure
  • Mining of Minerals: Seamless composite exploration cum mining cum production regime to be introduced; Removal of difference between captive and non captive mines; Mineral index; Rationalisation of stamp duty; 500 mining blocks would be offered through this transparent auction process
  • Restriction on imports of certain weapons;Ordinance factory board to be corporatised; Foreign Direct Investment limit in defence manufacturing under automatic route is being raised from 49% to 74%
  • Civil Aviation :Airspace Management rationalised; 6 more airports to be auctioned; additional investment in 12 airports for world-class facility; Rs 13,000 cr additional investment by private players in 12 airports; Airports Authority of India has awarded 3 airports out of 6 bid for operation & maintenance on Public-Private Partnership (PPP) basis
  • Power Distribution Companies in UTs shall be Privatised in line with tariff reform scheme; A Tariff policy with reforms will be released, including consumer rights, promotion of industry and sustainability of sector
  • Privatisation of distribution in Union Territories – sub-optimal performance of power distribution & supply, power departments/utilities in Union Territories will be privatised
  • Rs 8,100 crore outlay for viability gap funding in social infrastructure, by increasing the quantum from 20% to 30%
  • Liberal Geospatial Policy; Private Sector Participation to be increased; Private players can be allowed to use ISRO’s facilities; Indian private sector will be a co-traveller in India’s space sector journey. Will provide a level-playing field for private companies in satellites, launches & space-based services:
  • Atomic Energy Reforms: Research Atomic Reactor in PPP Mode; Atomic Energy-related reforms; link India’s robust start-up ecosystem to the nuclear sector – Technology Development cum Incubation Centres will be set up for fostering synergy between research facilities and tech entrepreneurs
COVID 19Hot Off The PressNews

LIVE UPDATES [16-05-2020]:

  • Focal Point: Structural Reforms
  • Reforms 8 Sectors: Coal, Minerals, Defence Production, Airspace Management, MRO, Distribution Companies in UTs, Space Sector, Atomic Energy
  • Coal: Commercial Mining of Coal on a revenue sharing basis; Liberalised Entry for people, Incentives for those who produce before the deadline; 50,000 Crore for coal evacuation infrastructure
  • Mining of Minerals: Seamless composite exploration cum mining cum production regime to be introduced; Removal of difference between captive and non captive mines; Mineral index; Rationalisation of stamp duty; 500 mining blocks would be offered through this transparent auction process
  • Restriction on imports of certain weapons;Ordinance factory board to be corporatised; Foreign Direct Investment limit in defence manufacturing under automatic route is being raised from 49% to 74%
  • Civil Aviation :Airspace Management rationalised; 6 more airports to be auctioned; additional investment in 12 airports for world-class facility; Rs 13,000 cr additional investment by private players in 12 airports; Airports Authority of India has awarded 3 airports out of 6 bid for operation & maintenance on Public-Private Partnership (PPP) basis
  • Power Distribution Companies in UTs shall be Privatised in line with tariff reform scheme; A Tariff policy with reforms will be released, including consumer rights, promotion of industry and sustainability of sector
  • Privatisation of distribution in Union Territories – sub-optimal performance of power distribution & supply, power departments/utilities in Union Territories will be privatised
  • Rs 8,100 crore outlay for viability gap funding in social infrastructure, by increasing the quantum from 20% to 30%
  • Liberal Geospatial Policy; Private Sector Participation to be increased; Private players can be allowed to use ISRO’s facilities; Indian private sector will be a co-traveller in India’s space sector journey. Will provide a level-playing field for private companies in satellites, launches & space-based services:
  • Atomic Energy Reforms: Research Atomic Reactor in PPP Mode; Atomic Energy-related reforms; link India’s robust start-up ecosystem to the nuclear sector – Technology Development cum Incubation Centres will be set up for fostering synergy between research facilities and tech entrepreneurs

 

Read the last three days of live updates of the decoding of Economic Relief below:

Read below the reliefs offered by the Finance Minister, with the focus being MSMEs:

LIVE UPDATES [14-05-2020] 

  • Focal point: Liquidity, Labour, Law and Land.
  • 6 Major steps for MSMEs
  • Collateral free Automatic Loans upto Rs 3 lakh Crores
  • 100 % credit guarantee
  • Additional Funds for MSME revival
  • Loans to be given till October 31st
  • Rupees 20 Crore for stressed MSMEs
  • 50,000 Crore equity to be infused for viable and potential MSMEs
  • New Definition of MSMEs — Investment can be upto 1 Cr and turnover upto 5 Crore
  • Global tender to be allowed upto Rs 20 Crores
  • Other interventions for MSMEs
  • Rs 2500 crores EPF support for businesses and Workers for 3 months
  • EPF contribution reduced for Business and Workers for 3 months — Rs 6750 Crores
  • Rs 30,000 crores liquidity facility for NBFC/HCs/MFIs
  • Rs 45,000 Crores Partial Credit Guarantee Scheme 2.0 for NBFC
  • Rs 90,000 CR liquidity injection for DISCOMs
  • Relief to contractors
  • Extension of registration and completion date of real estate projects under RERA; No individual applications needed; Suo Moto be done; Registered projects expiring on or after 25th March
  • Rs 50,000 crores Liquidity through TDS/TCS reductions till March 2021
  • Tax filing due date extended to 30th November, 2020
  • Pending refunds to charitable trusts and non-corporate businesses & professions including proprietorship, partnership, LLP and Co-operatives shall be issued immediately.
  • Due date of all income tax return for FY2019-20 extended from 31st July, 2020 & 31st October, 2020 to 30th November, 2020 and Tax audit from 30th September, 2020 to 31st October, 2020.
  • Date of Assessments getting barred on 30th September, 2020 extended to 31st December, 2020 and those getting barred on 31st March, 2021 will be extended to 30th September, 2021.
  • Period of Vivad se Vishwas Scheme for making payment without additional amount will be extended to 31st December, 2020

LIVE UPDATES [15-05-2020]:

  • FOCUS: Migrant Workers, Street vendors, Small Farmer, Self Employed, Traders, etc.
  • 9 Steps will be announced.
  • 14.62 crore person-days of work generated till 13th May 2020
  • 10,000 crore actual expenditure till date
  • National Floor Wage to be introduced
  • Re-skilling of workers
  • Universal minimum wages

Reliefs

  • Free food grain supply to all migrants for next 2 months [For non-card holders: 5 kgs of wheat or rice or 1 kg of chana]; State Governments to implement, Centre to borne costs
  • One Nation One Ration card to be implemented within 3 months
  • Affordable rented accommodation for migrants; Rental Housing Scheme;Migrant Workers / Urban Poor to have Affordable Rental Housing Complexes (ARHC): Government will launch a scheme under
  • Mudra Shishu Loans: Government of India will provide Interest subvention of 2% for prompt  MUDRA– Shishu Loans payees for a period of 12 months; Relief of Rs 1500 cr to MUDRA-Shishu loanees
  • Special Credit facility for Street Vendors: Easy access to credit; Rs 5000 cr Special Credit Facility
  • Middle Income Group with upto 6 to 18 lakh income group: Credit link subsidy scheme for housing to be extended till March 2021; 2.5 lakhs middle income families to benefit during 2020-21
  • To create job opportunities for Tribals /Adivasis-Plans worth Rs 6000 crores to be approved shortly under Compensatory Afforestation Management & Planning Authority (CAMPA) Funds
  • Rs 30,000 Crore additional emergency working capital fund through NABARD
  • Kisan Credit Card: 2 lakh Crore concessional credit for farmers; 2 lakh crore Concessional credit boost to 2.5 crore farmers through KisanCreditCards; Fishermen and Animal Husbandry farmers will also be included in this drive

Live Updates [16-05-2020]

  • Focal Point: Agriculture
  • One lakh Crore for — Strengthening Farming Infrastructure; Cold Storage, Grain Storage, etc.; Funding Agriculture Infrastructure Projects at farm-gate & aggregate points.
  • Rs 10, 000 Crore for boosting local products for Global sale;Vocal for Local with Global outreach; Formalisation of Micro Food Enterprises
  • Rs 20,000 crores for Fishermen through Pradhan Mantri Sampada Yojana
  • 100% vaccination of livestock;National Animal Disease Control Programme launched
  • Animal  Husbandry infrastructure fund — Rs, 15,000 Crores
  • Rs 4000 Crores to promote herbal cultivation in India that aims to cover 10 lakh hectare under herbal cultivation in 2 years; Corridor of medical plants to come up across banks of Ganga
  • Rs 500 Crores for Beekeeping initiatives
  • 500 crore for improving supply chain of fruits, vegetables, etc.;Govt. extends Operation Greens from Tomatoes, Onion and Potatoes to all fruits and vegetables
  • Amendment to Essential Commodities Act
  • Farmers & Farmers getting adequate choice to sell their produce at attractive price: Central Law to be introduced;
  • Law to implement agriculture marketing reforms to provide marketing choices to farmers; law will provide adequate choices to farmer to sell produce attractive price.
COVID 19Hot Off The PressNews

Background:

Amidst the Corona crisis, PM announced  a special economic package with a new resolution. This economic package will serve as an important link in the ‘AtmaNirbhar Bharat Abhiyan” (Self Reliant India Campaign)‘.

LIVE UPDATES:

  • FOCUS: Migrant Workers, Street vendors, Small Farmer, Self Employed, Traders, etc.
  • 9 Steps will be announced.
  • 14.62 crore person-days of work generated till 13th May 2020
  • 10,000 crore actual expenditure till date
  • National Floor Wage to be introduced
  • Re-skilling of workers
  • Universal minimum wages

Reliefs

  • Free food grain supply to all migrants for next 2 months [For non-card holders: 5 kgs of wheat or rice or 1 kg of chana]; State Governments to implement, Centre to borne costs
  • One Nation One Ration card to be implemented within 3 months
  • Affordable rented accommodation for migrants; Rental Housing Scheme;Migrant Workers / Urban Poor to have Affordable Rental Housing Complexes (ARHC): Government will launch a scheme under
  • Mudra Shishu Loans: Government of India will provide Interest subvention of 2% for prompt  MUDRA– Shishu Loans payees for a period of 12 months; Relief of Rs 1500 cr to MUDRA-Shishu loanees
  • Special Credit facility for Street Vendors: Easy access to credit; Rs 5000 cr Special Credit Facility
  • Middle Income Group with upto 6 to 18 lakh income group: Credit link subsidy scheme for housing to be extended till March 2021; 2.5 lakhs middle income families to benefit during 2020-21
  • To create job opportunities for Tribals /Adivasis-Plans worth Rs 6000 crores to be approved shortly under Compensatory Afforestation Management & Planning Authority (CAMPA) Funds
  • Rs 30,000 Crore additional emergency working capital fund through NABARD
  • Kisan Credit Card: 2 lakh Crore concessional credit for farmers; 2 lakh crore Concessional credit boost to 2.5 crore farmers through KisanCreditCards; Fishermen and Animal Husbandry farmers will also be included in this drive

Read below the reliefs offered yesterday by the Finance Minister, with the focus being MSMEs:

LIVE UPDATES [14-05-2020] 

  • Focal point: Liquidity, Labour, Law and Land.
  • 6 Major steps for MSMEs
  • Collateral free Automatic Loans upto Rs 3 lakh Crores
  • 100 % credit guarantee
  • Additional Funds for MSME revival
  • Loans to be given till October 31st
  • Rupees 20 Crore for stressed MSMEs
  • 50,000 Crore equity to be infused for viable and potential MSMEs
  • New Definition of MSMEs — Investment can be upto 1 Cr and turnover upto 5 Crore
  • Global tender to be allowed upto Rs 20 Crores
  • Other interventions for MSMEs
  • Rs 2500 crores EPF support for businesses and Workers for 3 months
  • EPF contribution reduced for Business and Workers for 3 months — Rs 6750 Crores
  • Rs 30,000 crores liquidity facility for NBFC/HCs/MFIs
  • Rs 45,000 Crores Partial Credit Guarantee Scheme 2.0 for NBFC
  • Rs 90,000 CR liquidity injection for DISCOMs
  • Relief to contractors
  • Extension of registration and completion date of real estate projects under RERA; No individual applications needed; Suo Moto be done; Registered projects expiring on or after 25th March
  • Rs 50,000 crores Liquidity through TDS/TCS reductions till March 2021
  • Tax filing due date extended to 30th November, 2020
  • Pending refunds to charitable trusts and non-corporate businesses & professions including proprietorship, partnership, LLP and Co-operatives shall be issued immediately.
  • Due date of all income tax return for FY2019-20 extended from 31st July, 2020 & 31st October, 2020 to 30th November, 2020 and Tax audit from 30th September, 2020 to 31st October, 2020.
  • Date of Assessments getting barred on 30th September, 2020 extended to 31st December, 2020 and those getting barred on 31st March, 2021 will be extended to 30th September, 2021.
  • Period of Vivad se Vishwas Scheme for making payment without additional amount will be extended to 31st December, 2020