FM announces measures for relief and credit support related to businesses

PTI

Nirmala Sitharaman addressing media on Economic Package (screengrab)

Nirmala Sitharaman addressing media on Economic Package (screengrab)

Finance Minister Nirmala Sitharaman on Wednesday announced Rs 3 lakh crore collateral free automatic loan for businesses, including MSMEs.

This will benefit 45 lakh small businesses, she said detailing parts of the Rs 20 lakh crore economic stimulus package.

The loan will have 4 year tenure and will have 12 month moratorium, she said.

Also, Rs 20,000 crore subordinate debt will be provided for stressed MSMEs, she said adding this would benefit 2 lakh such businesses.

The Finance Minister said a fund of funds for MSME is being created, which will infuse Rs 50,000 crore equity in MSMEs with growth potentials.

Also, MSME definition has been changed to allow units with investment up to Rs 1 crore to be called micro units in place of Rs 25 lakh now.

Also units with turnover up to Rs 5 crore to be called micro units, she said, adding a turnover based criteria is being introduced to define small businesses.

The investment and turnover limits for small and medium businesses have likewise been raised to allow them to retain fiscal and other benefits, she said.

Global tenders will be banned for government procurement up to Rs 200 crore, she said, adding this would help MSMEs to compete and supply in government tenders.

Finance Minister sought to clear the air around Prime Minister’s self-reliance call, saying it does not mean that India will look only inwards and become an “isolationist” country.

She said that the call talks about a confident India which can rest on its strengths and also contribute to the globe.

India has the capability and entrepreneurship to built capabilities and help the world, the minister added.

“Certainly when Prime Minister says ‘aatmanirbhar’ Bharat, it is not to look inwards and cut India to become an isolationist country.

“It certainly talks about a confident India which can rest on its strengths and also be able to contribute to the globe, the way in which the Prime Minister rightly pointed out the production of PPEs (personal protective equipment), and masks and also ventillators has rapidly grown within these 40 days to an extent,” she said, while addressing reporters here about Rs 20 lakh crore economic package.

PM Modi on Tuesday announced a Rs 20 lakh crore economic stimulus package on Tuesday and urged citizens to “buy local” to make India self-reliant.

His call was seen as a turn towards protectionism. Nirmala Sitharaman also said the Rs 20 lakh crore economic package is to spur growth and build a self-reliant India.

The package was finalised after consulting various stakeholders.