Prime Minister announced a special economic package and gave a clarion call for Atmanirbhar Bharat Abhiyan. The announcements by the government during COVID crisis and decisions taken by RBI, is to the tune of Rs 20 lakh crore, which is equivalent to almost 10% of India’s GDP. The package is inclusive of earlier measures announced by Government and Reserve Bank of India
Some of the earlier announcement made by government were:
Five Pillars of Atmanirbhar Bharat Abhiyan
The self-reliant India will stand on five pillars:
- Economy
- Infrastructure
- System
- Vibrant Demography
- Demand
Five Tranches of Atmanirbhar Bharat Abhiyan
The Atmanirbhar Bharat Abhiyan has been announced in five Tranches:
Tranche 1 – Atmanirbhar Bharat Abhiyan
The Tranche 1 of Atmanirbhar Bharat Abhiyan consists of:
- Rs 3 lakh crore Emergency Working Capital Facility for Businesses, including MSMEs
- To provide relief to the business, additional working capital finance of 20% of the outstanding credit as on 29 February 2020, in the form of a Term Loan at a concessional rate of interest will be provided.
- This will be available to units with upto Rs 25 crore outstanding and turnover of up to Rs 100 crore whose accounts are standard
- The units will not have to provide any guarantee or collateral of their own.
- The amount will be 100% guaranteed by the Government of India providing a total liquidity of Rs. 3.0 lakh crores to more than 45 lakh MSMEs.
- Rs 20,000 crore Subordinate Debt for Stressed MSMEs
- Provision made for Rs. 20,000 cr subordinate debt for two lakh MSMEs which are NPA or are stressed.
- Government will support them with Rs. 4,000 Cr. to Credit Guarantee Trust for Micro and Small enterprises (CGTMSE)
- Banks are expected to provide the subordinate-debt to promoters of such MSMEs equal to 15% of his existing stake in the unit subject to a maximum of Rs 75 lakhs
- Rs 50,000 crores equity infusion through MSME Fund of Funds
- Govt will set up a Fund of Funds with a corpus of Rs 10,000 crore that will provide equity funding support for MSMEs.
- The Fund of Funds shall be operated through a Mother and a few Daughter funds.
- It is expected that with leverage of 1:4 at the level of daughter funds, the Fund of Funds will be able to mobilise equity of about Rs 50,000 crores.
- New definition of MSME
- Micro Enterprises: Manufacturing and services enterprises with investments up to Rs 1 crore and turnover up to Rs 5 crore will be classified as Micro Enterprises
- Small Enterprises: Manufacturing and services enterprises with investments up to Rs 10 crore and turnover up to Rs 50 crore will be classified as Small Enterprises
- Medium Enterprises: Manufacturing and services enterprises with investments up to Rs 50 crore and turnover up to Rs 250 crore will be classified as Medium Enterprises
- Other Measures for MSME
- e-market linkage for MSMEs will be promoted to act as a replacement for trade fairs and exhibitions. MSME receivables from Government and CPSEs will be released in 45 days
- No Global tenders for Government tenders of up to Rs 200 crores.
- General Financial Rules (GFR) of the Government will be amended to disallow global tender enquiries in procurement of Goods and Services of value of less than Rs 200 crores
- Employees Provident Fund Support for business and organised workers
- The scheme introduced as part of PMGKP under which Government of India contributes 12% of salary each on behalf of both employer and employee to EPF will be extended by another 3 months for salary months of June, July and August 2020.
- Total benefits accrued is about Rs 2500 crores to 72.22 lakh employees.
- EPF Contribution to be reduced for Employers and Employees for 3 months
- Statutory PF contribution of both employer and employee reduced to 10% each from existing 12% each for all establishments covered by EPFO for next 3 months.
- This will provide liquidity of about Rs.2250 Crore per month.
- Rs 30,000 crores Special Liquidity Scheme for NBFC/HFC/MFIs
- Government will launch Rs 30,000 crore Special Liquidity Scheme, liquidity being provided by RBI.
- Investment will be made in primary and secondary market transactions in investment grade debt paper of NBFCs, HFCs and MFIs.
- This will be 100 percent guaranteed by the Government of India.
- Rs 45,000 crores Partial credit guarantee Scheme 2.0 for Liabilities of NBFCs/MFIs
- Existing Partial Credit Guarantee scheme is being revamped and now will be extended to cover the borrowings of lower rated NBFCs, HFCs and other Micro Finance Institutions (MFIs).
- Government of India will provide 20 percent first loss sovereign guarantee to Public Sector Banks.
- Rs 90,000 crore Liquidity Injection for DISCOMs
- Power Finance Corporation and Rural Electrification Corporation will infuse liquidity in the DISCOMS to the extent of Rs 90000 crores in two equal instalments.
- This amount will be used by DISCOMS to pay their dues to Transmission and Generation companies.
- Further, CPSE GENCOs will give a rebate to DISCOMS on the condition that the same is passed on to the final consumers as a relief towards their fixed charges.
- Relief to Contractors
- All central agencies like Railways, Ministry of Road Transport and Highways and CPWD will give extension of up to 6 months for completion of contractual obligations, including in respect of EPC and concession agreements
- Relief to Real Estate Projects
- State Governments are being advised to invoke the Force Majeure clause under RERA.
- The registration and completion date for all registered projects will be extended up to 6 months and may be further extended by another 3 months based on the State’s situation.
- Various statutory compliances under RERA will also be extended concurrently.
- Tax Relief to Business
- The pending income tax refunds to charitable trusts and non-corporate businesses and professions including proprietorship, partnership and LLPs and cooperatives shall be issued immediately.
- Tax related measures
- Reduction in Rates of ‘Tax Deduction at Source’ and ‘Tax Collected at Source” –
- The TDS rates for all non-salaried payment to residents, and tax collected at source rate will be reduced by 25 percent of the specified rates for the remaining period of FY 20-21.
- This will provided liquidity to the tune of Rs 50,000 Crore.
- The due date of all Income Tax Returns for Assessment Year 2020-21 will be extended to 30 November, 2020.
- Similarly, tax audit due date will be extended to 31 October 2020.
- The date for making payment without additional amount under the “Vivad Se Vishwas” scheme will be extended to 31 December, 2020.
Tranche 2 – Atmanirbhar Bharat Abhiyan
These measures are supposed to ameliorate the hardships faced specifically by migrant labours, street vendors, migrant urban poor, small traders self-employed people, small farmers and housing. The Tranche 2 of Atmanirbhar Bharat Abhiyan consists of:
- Free food grains supply to migrants for 2 months
- For the migrant labour, additional food grain to all the States/UTs at the rate of 5 kg per migrant labourer and 1 kg Chana per family per month for two months i.e. May and June, 2020 free of cost shall be allocated.
- Migrant labourers not covered under National Food Security Act or without a ration card in the State/UT in which they are stranded at present will be eligible.
- 8 Lakh MT of food-grain and 50,000 MT of Chana shall be allocated.
- The entire outlay of Rs. 3500 crore will be borne by Government of India.
- One Nation one Ration Card – Technology system to be used enabling Migrants to access PDS (Ration) from any Fair Price Shops in India by March,2021
- Pilot scheme for portability of ration cards will be extended to 23 states.
- 67 crore beneficiaries covering 83% of PDS population will be covered by National portability of Ration cards by August, 2020.
- 100% National portability will be achieved by March, 2021.
- This scheme will enable a migrant worker and their family members to access PDS benefits from any Fair Price Shop in the country.
- This will ensure that the people in transit, especially migrant workers can also get the benefit of PDS benefit across the country.
- Scheme for Affordable Rental Housing Complexes for Migrant Workers and Urban Poor to be launched
- Central Government will launch a scheme for migrant workers and urban poor to provide ease of living at affordable rent.
- Affordable Rental Housing Complexes will provide social security and quality life to migrant labour, urban poor, and students etc.
- This will be done through converting government funded houses in the cities into Affordable Rental Housing Complexes (ARHC) under PPP mode through concessionaire;
- Manufacturing units, industries, institutions, associations to develop Affordable Rental Housing Complexes (ARHC) on their private land and operate
- Incentivizing State Govt agencies/Central Government Organizations on similar lines to develop Affordable Rental Housing Complexes (ARHC) and operate.
- 2% Interest Subvention for 12 months for Shishu MUDRA loanees
- Government of India will provide Interest subvention of 2% for prompt payees for a period of 12 months to MUDRA Shishu loanees, who have loans below Rs 50,000.
- The current portfolio of MUDRA Shishu loans is around Rs 1.62 Lakh crore.
- This will provide relief of about Rs 1,500 crore to Shishu MUDRA loanee.
- Rs 5,000 crore Credit facility for Street Vendors
- A special scheme will be launched to facilitate easy access to credit to Street vendors, who are amongst the most adversely impacted by the present situation for enabling them to restart their businesses.
- Under this scheme, bank credit facility for initial working capital up to Rs. 10,000 for each enterprise will be extended.
- This scheme will cover urban as well as rural vendors doing business in the adjoining urban areas.
- Use of digital payments and timely repayments will be incentivized through monetary rewards.
- It is expected that 50 lakh street vendors will be benefitted under this scheme and credit of Rs. 5,000 crore would flow to them.
- Extension of Credit Linked Subsidy Scheme for MIG under PMAY (Urban)
- The Credit Linked Subsidy Scheme for Middle Income Group (annual Income between Rs 6 and 18 lakhs) will be extended up to March 2021.
- This will benefit 2.5 lakhs middle income families during 2020-21 and will lead to investment of over Rs 70,000 crore in housing sector.
- This will create significant number of jobs by giving boost to Housing sector and will stimulate demand for steel, cement, transport and other construction materials.
- Rs 6,000 crore for Creating employment using CAMPA funds
- Approximately Rs 6,000 crore of funds under Compensatory Afforestation Management & Planning Authority (CAMPA) will be used for Afforestation and Plantation works, including in urban areas, Artificial regeneration, assisted natural regeneration, Forest management, soil & moisture conservation works, Forest protection, forest and wildlife related infrastructure development, wildlife protection and management etc.
- Government of India will grant immediate approval to these plans amounting to Rs 6000 crore.
- This will create job opportunities in urban, semi-urban and rural areas and also for Tribals (Adivashis).
- Rs 30,000 crore Additional Emergency Working Capital for farmers through NABARD
- NABARD will extend additional re-finance support of Rs 30,000 crore for meeting crop loan requirement of Rural Cooperative Banks and RRBs.
- This refinance will be front-loaded and available on tap.
- This is over and above Rs 90,000 crore that will be provided by NABARD to this sector in the normal course.
- This will benefit around 3 crore farmers, mostly small and marginal and it will meet their post-harvest Rabi and current Kharif requirements.
- Rs 2 lakh crore credit boost to 2.5 crore farmers under Kisan Credit Card Scheme
- A special drive to provide concessional credit to PM-KISAN beneficiaries through Kisan Credit Cards.
- Fisherman and Animal Husbandy Farmers will also be included in this drive.
- This will inject additional liquidity of Rs 2 lakh crore in the farm sector.
- 5 crore farmers will be covered.
Tranche 3 – Atmanirbhar Bharat Abhiyan
These measures are intended to strengthen Infrastructure Logistics, Capacity Building, Governance and Administrative Reforms for Agriculture, Fisheries and Food Processing Sectors. The Tranche 3 of Atmanirbhar Bharat Abhiyan consists of:
- Rs 1 lakh crore Agri Infrastructure Fund for farm-gate infrastructure for farmers
- Financing facility of Rs. 1,00,000 crore will be provided for funding Agriculture Infrastructure Projects at farm-gate & aggregation points (Primary Agricultural Cooperative Societies, Farmers Producer Organizations, Agriculture entrepreneurs, Start-ups, etc.).
- Impetus for development of farm-gate & aggregation point, affordable and financially viable Post Harvest Management infrastructure.
- Rs 10,000 crore scheme for Formalisation of Micro Food Enterprises (MFE)
- A Scheme promoting vision of Prime Minister Shri Narendra Modi: ‘Vocal for Local with Global outreach’ will be launched to help 2 lakh MFEs who need technical upgradation to attain FSSAI food standards, build brands and marketing.
- Existing micro food enterprises, Farmer Producer Organisations, Self Help Groups and Cooperatives to be supported.
- The focus will be on women and SC/ST owned units and those in Aspirational districts and a Cluster based approach (e.g. Mango in UP, Tomato in Karnataka, Chilli in Andhra Pradesh, Orange in Maharashtra etc.) will be followed.
- Rs 20,000 crore for fisherman through Pradhan Mantri Matsya Sampada Yojana (PMMSY)
- The Government will launch the PMMSY for integrated, sustainable, inclusive development of marine and inland fisheries.
- Rs 11,000 crore for activities in Marine, Inland fisheries and Aquaculture and Rs. 9000 crore for Infrastructure – Fishing Harbours, Cold chain, Markets etc shall be provided.
- Cage Culture, Seaweed farming, Ornamental Fisheries as well as New Fishing Vessels, Traceability, Laboratory Network etc. will be key activities.
- There will be provisions of Ban Period Support to fishermen (during the period fishing is not permitted), Personal & Boat Insurance.
- This will lead to Additional Fish Production of 70 lakh tones over 5 years, Employment to over 55 lakh persons and double the exports to Rs 1,00,000 crore.
- The focus will be on Islands, Himalayan States, North-east and Aspirational Districts.
- National Animal Disease Control Programme
- National Animal Disease Control Programme for Foot and Mouth Disease (FMD) and Brucellosis launched with total outlay of Rs. 13,343 crore to ensure 100% vaccination of cattle, buffalo, sheep, goat and pig population (total 53 crore animals) for Foot and Mouth Disease (FMD) and for brucellosis.
- Till date, 1.5 crore cows & buffaloes tagged and vaccinated.
- Animal Husbandry Infrastructure Development Fund – Rs. 15,000 crore
- An Animal Husbandry Infrastructure Development Fund of Rs. 15,000 crore will be set up, with an aim to support private investment in Dairy Processing, value addition and cattle feed infrastructure.
- Incentives will be given for establishing plants for export of niche products.
- Promotion of Herbal Cultivation
- The National Medicinal Plants Board (NMPB) has supported 2.25 lakh hectare area under cultivation of medicinal plants.
- 10,00,000 hectare will be covered under Herbal cultivation in next two years with outlay of Rs. 4,000 crore.
- This will lead to Rs. 5,000 crore income generation for farmers.
- There will be network of regional Mandis for Medicinal Plants.
- NMPB will bring 800-hectare area by developing a corridor of medicinal plants along the banks of Ganga.
- Beekeeping initiatives – Rs 500 crore
Government will implement a scheme for:
- Infrastructure development related to Integrated Beekeeping Development Centres, Collection, Marketing and Storage Centres, Post Harvest & value Addition facilities etc;
- Implementation of standards & Developing traceability system
- Capacity building with thrust on women;
- Development of quality nucleus stock and bee breeders.
This will lead to increase in income for 2 lakh beekeepers and quality honey to consumers.
- From ‘TOP’ to TOTAL – Rs 500 crore
- “Operation Greens” run by Ministry of Food Processing Industries (MOFPI) will be extended from tomatoes, onion and potatoes to ALL fruit and vegetables.
- The Scheme would provide 50% subsidy on transportation from surplus to deficient markets, 50% subsidy on storage, including cold storages and will be launched as pilot for the next 6 months and will be extended and expanded.
- This will lead to better price realisation to farmers, reduced wastages, affordability of products for consumers.
- Amendments to Essential Commodities Act to enable better price realisation for farmers
- The Government will amend Essential Commodities Act.
- Agriculture food stuffs including cereals, edible oils, oilseeds, pulses, onions and potato shall be deregulated.
- Stock limit will be imposed under very exceptional circumstances like national calamities, famine with surge in prices.
- Further, No such stock limit shall apply to processors or value chain participant, subject to their installed capacity or to any exporter subject to the export demand.
- Agriculture Marketing Reforms to provide marketing choices to farmers
A Central law will be formulated to provide –
- adequate choices to the farmer to sell their produce at remunerative price;
- barrier free Inter-State Trade;
- a framework for e-trading of agriculture produce.
- Agriculture Produce Pricing and Quality Assurance:
- The Government will finalise a facilitative legal framework to enable farmers to engage with processors, aggregators, large retailers, exporters etc. in a fair and transparent manner.
- Risk mitigation for farmers, assured returns and quality standardisation shall form integral part of the framework.
Tranche 4
The government announced structural reforms in the eight sectors of Coal, Minerals, Defence production, Civil Aviation, Power Sector, Social Infrastructure, Space and Atomic energy. The Tranche 4 of Atmanirbhar Bharat Abhiyan consists of:
- COAL SECTOR
- Introduction of Commercial Mining in Coal Sector
- The Government will introduce competition, transparency and private sector participation in the Coal Sector through:
- A revenue sharing mechanism instead of regime of fixed Rupee/tonne. Any party can bid for a coal block and sell in the open market.
- Entry norms will be liberalised.
- Nearly 50 Blocks will be offered immediately. There will not be any eligibility conditions, only upfront payment with a ceiling will be provided.
- There will be exploration-cum-production regime for partially explored blocks against earlier provision of auction of fully explored coal blocks. This will allow private sector participation in exploration.
- Production earlier than scheduled will be incentivized through rebate in revenue-share.
- Diversified Opportunities in Coal Sector
- Coal Gasification / Liquefication will be incentivised through rebate in revenue share. This will result in significantly lower environment impact and also assist India in switching to a gas-based economy.
- Infrastructure development of Rs. 50,000 crore will be done for evacuation of enhanced Coal India Limited’s (CIL) target of 1 billion tons coal production by 2023-24 plus coal production from private blocks. This will include Rs 18,000 crore worth of investment in mechanised transfer of coal (conveyor belts) from mines to railway sidings. This measure will also help reduce environmental impact.
- Liberalised Regime in Coal Sector
- Coal Bed Methane (CBM) extraction rights will be auctioned from Coal India Limited’s (CIL) coal mines.
- Ease of Doing Business measures, such as Mining Plan simplification, will be taken. This will allow for automatic 40% increase in annual production.
- Concessions in commercial terms given to CIL’s consumers (relief worth Rs 5,000 crore offered). Reserve price in auctions for non-power consumers reduced, credit terms eased, and lifting period has been enhanced.
- MINERAL SECTOR
- Enhancing Private Investments in the Mineral Sector
There will be structural reforms to boost growth, employment and bring state-of-the-art technology especially in exploration through:
- Introduction of a seamless composite exploration-cum-mining-cum-production regime.
- 500 mining blocks would be offered through an open and transparent auction process.
- Joint Auction of Bauxite and Coal mineral blocks to enhance Aluminum Industry’s competitiveness will be introduced to help Aluminum industry reduce electricity costs.
- Policy reforms in Mineral Sector
- The distinction between captive and non-captive mines to allow transfer of mining leases and sale of surplus unused minerals, leading to better efficiency in mining and production shall be removed. Ministry of Mines is in the process of developing a Mineral Index for different minerals. There will be rationalisation of stamp duty payable at the time of award of mining leases.
- DEFENCE SECTOR
- Enhancing Self Reliance in Defence Production
- ‘Make in India’ for Self-Reliance in Defence Production will be promoted by notifying a list of weapons/platforms for ban on import with year wise timelines, Indigenisation of imported spares, and separate budget provisioning for domestic capital procurement. This will help reduce huge Defence import bill
- Improve autonomy, accountability and efficiency in Ordnance Supplies by Corporatisation of Ordnance Factory Board.
- Policy Reforms in Defence Production
- FDI limit in the Defence manufacturing under automatic route will be raised from 49% to 74%.
- There will be time-bound defence procurement process and faster decision making will be ushered in by setting up of a Project Management Unit (PMU) to support contract management; Realistic setting of General Staff Qualitative Requirements (GSQRs) of weapons/platforms and overhauling Trial and Testing procedures.
- CIVIL AVIATION SECTOR
- Efficient Airspace Management for Civil Aviation
- Restrictions on utilisation of the Indian Air Space will be eased so that civilian flying becomes more efficient.
- This will bring a total benefit of about Rs 1,000 crore per year for the aviation sector.
- This will lead to optimal utilization of airspace; reduction in fuel use, time and will have positive environmental impact.
- More World-Class Airports through PPP
- 6 more airports have been identified for 2nd round bidding for Operation and Maintenance on Public-Private Partnership (PPP) basis.
- Additional Investment by private players in 12 airports in 1st and 2nd rounds is expected to bring around Rs. 13,000 crore.
- Another 6 airports will be put out for the third round of bidding.
- India to become a global hub for Aircraft Maintenance, Repair and Overhaul (MRO)
- Tax regime for MRO ecosystem has been rationalized.
- Aircraft component repairs and airframe maintenance to increase from Rs 800 crore to Rs 2,000 crore in three years.
- It is expected that major engine manufacturers in the world would set up engine repair facilities in India in the coming year.
- Convergence between Defence sector and the civil MROs will be established to create economies of scale. This will lead to maintenance cost of airlines to come down.
- POWER SECTOR
- Tariff Policy Reform
Tariff Policy laying out the following reforms will be released:
- Consumer Rights
- DISCOM inefficiencies not to burden consumers
- Standards of Service and associated penalties for DISCOMs
- DISCOMs to ensure adequate power; load-shedding to be penalized
- Promote Industry
- Progressive reduction in cross subsidies
- Time bound grant of open access
- Generation and transmission project developers to be selected competitively
- Sustainability of Sector
- No Regulatory Assets
- Timely payment of Gencos
- DBT for subsidy; Smart prepaid meters
- Privatization of Distribution in UTs
- Power Departments / Utilities in Union Territories will be privatised.
- This will lead to better service to consumers and improvement in operational and financial efficiency in Distribution.
- This will also provide a model for emulation by other Utilities across the country.
- SOCIAL INFRASTRUCTURE: BOOSTING PRIVATE SECTOR INVESTMENT THROUGH REVAMPED VIABILITY GAP FUNDING SCHEME – Rs 8,100 CRORE
- The Government will enhance the quantum of Viability Gap Funding (VGF) upto 30% each of Total Project Cost as VGF by the Centre and State/Statutory Bodies.
- For other sectors, VGF existing support of 20 % each from Government of India and States/Statutory Bodies shall continue.
- Total outlay is Rs. 8,100 crore.
- Projects shall be proposed by Central Ministries/ State Government/ Statutory entities.
- SPACE SECTOR: BOOSTING PRIVATE PARTICIPATION IN SPACE ACTIVITIES
- There shall be level playing field provided to private companies in satellites, launches and space-based services.
- Predictable policy and regulatory environment to private players will be provided.
- Private sector will be allowed to use ISRO facilities and other relevant assets to improve their capacities.
- Future projects for planetary exploration, outer space travel etc shall also be open for private sector.
- There will be liberal geo-spatial data policy for providing remote-sensing data to tech-entrepreneurs.
- ATOMIC ENERGY RELATED REFORMS
- Research reactor in PPP mode for production of medical isotopes shall be established to promote welfare of humanity through affordable treatment for cancer and other diseases.
- Facilities in PPP mode to use irradiation technology for food preservation – to compliment agricultural reforms and assist farmers shall also be established.
- India’s robust start-up ecosystem will be linked to nuclear sector and for this, Technology Development-cum-Incubation Centres will be set up for fostering synergy between research facilities and tech-entrepreneurs.
Tranche 5
The seven measures for providing employment, support to businesses, Ease of Doing Business, and State Governments as well sectors such as Education and Health. The Tranche 5 of Atmanirbhar Bharat Abhiyan consists of:
- Rs 40,000 crore increase in allocation for MGNREGS to provide employment boost
- The Government will now allocate an additional Rs 40,000 crore under MGNREGS.
- It will help generate nearly 300 crore person days in total addressing need for more work including returning migrant workers in Monsoon season as well.
- Creation of larger number of durable and livelihood assets including water conservation assets will boost the rural economy through higher production.
- Health Reforms & Initiatives
- Public Expenditure on Health will be increased by investing in grass root health institutions and ramping up Health and Wellness Centres in rural and urban areas.
- Setting up of Infectious Diseases Hospital Blocks in all districts and strengthening of lab network and surveillance by Integrated Public Health Labs in all districts & block level Labs & Public Health Unit to manage pandemics.
- Further, National Institutional Platform for One health by ICMR will encourage research.
- Implementation of National Digital Health Blueprint under the National Digital Health Mission.
- Technology Driven Education with Equity post-COVID
- PM eVIDYA, a programme for multi-mode access to digital/online education to be launched immediately.
- Manodarpan, an initiative for psycho-social support for students, teachers and families for mental health and emotional well-being to be launched immediately as well.
- New National Curriculum and Pedagogical framework for school, early childhood and teachers will also be launched.
- National Foundational Literacy and Numeracy Mission for ensuring that every child attains Learning levels and outcomes in grade 5 by 2025 will be launched by December 2020.
- Further enhancement of Ease of Doing Business through IBC related measures
- Minimum threshold to initiate insolvency proceedings has been raised to Rs. 1 crore (from Rs. 1 lakh, which largely insulates MSMEs).
- Special insolvency resolution framework for MSMEs under Section 240A of the Code will be notified soon
- Suspension of fresh initiation of insolvency proceedings up to one year, depending upon the pandemic situation.
- Empowering Central Government to exclude COVID 19 related debt from the definition of “default” under the Code for the purpose of triggering insolvency proceedings.
- Decriminalisation of Companies Act defaults
- Decriminalisation of Companies Act violations involving minor technical and procedural defaults such as shortcomings in CSR reporting, inadequacies in Board report, filing defaults, delay in holding of AGM.
- The Amendments will de-clog the criminal courts and NCLT.
- 7 compoundable offences altogether dropped and 5 to be dealt with under alternative framework.
- Ease of Doing Business for Corporates
Key reforms include:
- Direct listing of securities by Indian public companies in permissible foreign jurisdictions.
- Private companies which list NCDs on stock exchanges not to be regarded as listed companies.
- Including the provisions of Part IXA (Producer Companies) of Companies Act, 1956 in Companies Act, 2013.
- Power to create additional/ specialized benches for NCLAT
- Lower penalties for all defaults for Small Companies, One-person Companies, Producer Companies & Start Ups.
- Public Sector Enterprise Policy for a New, Self-reliant India
Government will announce a new policy whereby –
- List of strategic sectors requiring presence of PSEs in public interest will be notified
- In strategic sectors, at least one enterprise will remain in the public sector but private sector will also be allowed
- In other sectors, PSEs will be privatized (timing to be based on feasibility etc.)
- To minimise wasteful administrative costs, number of enterprises in strategic sectors will ordinarily be only one to four; others will be privatised/ merged/ brought under holding companies
- Support to State Governments
- Centre has decided to increase borrowing limits of States from 3% to 5% for 2020-21 only.
- This will give States extra resources of Rs. 4.28 lakh crore.
- Part of the borrowing will be linked to specific reforms (including recommendations of the Finance Commission).
- Reform linkage will be in four areas: universalisation of ‘One Nation One Ration card’, Ease of Doing Business, Power distribution and Urban Local Body revenues.
- A specific scheme will be notified by Department of Expenditure on the following pattern:
- Unconditional increase of 0.50%
- 1% in 4 tranches of 0.25%, with each tranche linked to clearly specified, measurable and feasible reform actions
- Further 0.50% if milestones are achieved in at least three out of four reform areas
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