In order to provide respite to millions of small businesses reeling under the impact of the Covid-19 lockdown, Finance Minister Nirmala Sitharaman on Wednesday announced a slew of liquidity measures, which include collateral-free automatic loan worth Rs 3-lakh crore. Borrowers with up to Rs 25 crore outstanding and Rs 100 crore turnover are eligible.
To provide strained MSMEs with equity support, Government will also enable provision of Rs. 20,000 crore as subordinate debt. For the Subordinate debt for stressed MSMEs, promoters of the MSME will be given debt by banks, which will then be pervaded by promoter as equity in the Unit. Subordinated debt facility will aid 2 lakh stressed MSMEs.
“The FM’s announcements on COVID-19 package is most welcome and certainly a path-breaking improvement. Loans to MSME, support to stressed MSME, allowing MSMEs to participate in Government tenders upto Rs 200 crore project and change in definition of MSMEs are all path-breaking steps.
The COVID-19 package ensures that the government’s move to reduce the rates of tax deduction at source (TDS) and tax collection at source (TCS) by 25% will benefit investors and professionals by putting more cash in their hands. The government on Wednesday announced a ₹90,000 crore liquidity injection into fund-starved electricity distribution companies as part of a stimulus package to revive the country’s battered economy.
The Union government’s stimulus package to inject liquidity and improve credit flow is likely to cheer markets on Thursday, even as market analysts feel the impact of the policies will depend on their implementation. So, do you think the COVID-19 package is any good for your livelihood in the current situation?