Government Announces Atmanirbhar Bharat Relief Package for MSMEs

The Government has announced the Special economic & comprehensive relief package of ₹20 lakh crores. This package is to provide relief and credit support to the MSME businesses and to revive the Indian Economy that has badly hit due to the COVID-19 lockdown. The motive is to create an “Atmanirbhar Bharat” in the battle against COVID-19.

Background of the Corona Relief Package

Our Honourable Prime Minister Sh. Narendra Modi had given address to the nation on 12th May 2020. He had announced a ₹20 lakh crore relief package to revive the Indian economy from the COVID-19 Lockdown, which is equal to 10% of India’s GDP.

Highlights of the Atmanirbhar Bharat Relief Package

The Honourable Finance Minister Smt. Nirmala Sitharaman has given all the details of this economic revival package. There are numerous reliefs announced for the MSME businesses. Moreover, the definition of MSMEs has now been changed.

We will discuss all the highlights of this package.

#1. ₹ 3 lakh crores Collateral free Automatic Loans to be provided to MSME Businesses, for a period of 4 years.
#2. ₹ 20,000 crores Subordinate Loan to the MSMEs
#3. ₹ 50,000 crores equity infusion to be done through MSME “Fund of Funds”
#4. A new definition of MSMEs has been introduced
#5. Now onwards, the Global tender would not be approved up to ₹ 200 crores.
#6. Fintech will be used to improve transaction-based lending, with the use of the data generated by the Government e-marketplace. For this, the Government has already access to the data of the traders having GeM registration.
#7. ₹ 2500 crores EPF contribution support for the Businesses having EPF registration as well as the employees further three months.
#8. The EPF contribution limit will be reduced for employers & employees for the next 3 months, from 12% to 10%. A total of ₹ 6750 crores has been sanctioned for this.

#9. Direct Tax Reliefs

Truly, these measures will provide much relief and growth impetus to small businesses. However, the business must have the Udyog Aadhaar MSME registration to get benefits from these reliefs.