Insights & Research
CS. Muhammed Sahal
Partner & Head, Corporate Advisory
The impact of the coronavirus (COVID-19) is being felt by all businesses around the world. Most of the countries declared various business stimulation packages to boost their respective economy which has been terribly effected due to this global pandemic. Last day our Hon. Prime Minister also declared “Atmanirbhar Bharat Abhiyan” (Self-reliant India Mission), a relief package to Indian business community and especially for Micro, Small and Medium enterprises (MSME’s). As per the Finance ministry press note, Government shall be pledging total spending of Rs. 20 Lakh Crore through different means to boost the economy and overcome the present unprecedented situation. This will attribute close to 10 % of Indian GDP and interestingly a fairly good block is being allotted to Business people especially MSME's. Here I am trying to provide an overview various schemes and relaxations declared by the Government of India for MSME's
1. What are the different packages our Hon. Finance Minister Announces under “Atmanirbhar Bharat Abhiyan” ?
Broadly Finance Minister announces 15 different financial packages across following sectors;
2. What is the new definition of MSME’s who can avail these packages under this scheme?
There has been a long-pending demand for revision in the threshold for recognising a business as an MSME. The new announcement by the Finance Ministry shall facilitate more entities to be included in the definition of MSME and thereby avail many of the schemes and benefits announced for MSME’s.
Here is the revised definition of MSME’s based on its turnover and Investment applicable for both manufacturing and service industries:
3. What are details of loans declared under this scheme to MSMEs?
A. Total Earmarked Loan Amount:
B. Who can avail this loan facility?
C. Criteria or maximum limit of loans?
D. Tenure and interest rate ?
E. Collateral or guarantee requirement ?
F. Scheme open period ?
4. What are the various benefits provided to the employees under various govt schemes?
Eligibility: If your establishment having up to 100 employees with 90 % or more of such employees’ monthly wages is less than 15,000/-.
Benefit: Under Pradhan Mantri Garib Kalyan Package [PMGK], payment of 12% of employer and 12% employee contributions was made into EPF accounts of eligible establishments. This was provided earlier for salary months of March, April and May 2020.
Eligibility: For establishment other than above
Benefit: PF Contribution of both employer and employee will be reduced to 10% each from existing 12%. for all establishments covered by EPFO for next 3 months.
5. What are the other major interventions or relaxation provided specifically to MSME Sector?
6. What are the various tax relations and extensions provided under this scheme?
By announcing one of the major finance package ranking after Japan, US, Sweden, Australia and Germany even though it includes various existing packages from RBI and the Government of India since this Covid-19 era the business house and the entire country is having great expectation and looking for a bright future from these revival and boostage packages. However, the whole success lays in the hands of implementation and execution stage which government should give at most consideration. As our previous governor Mr. Raguram Rajan rightly said "Tracking down every penny to the last beneficiary that stands in a bank que without middle-man should matter of concern, numbers are irrelevant until the end use is verified."Download Attachment
© 2023 Business Consultant & Law Firm - Legacy Partners. All Rights Reserved.
Designed by Nuewelle Digital Solutions LLP
We typically reply in a few minutes