• Five pillars of Nation – Economy, Infrastructure, Technology, Demography, Demand
  • Special Economic Package of INR 20 Lakhs Crores , 10% of India’s GDP
  • Focus for ANB package is Land, Labour, Liquidity and Law
  • Aims to promote Local Products –Be Vocal and Buy Local



Emergency Credit Line

Emergency Credit line to Business/MSMEs from Banks and NBFCs up to 20% of Outstanding credit as on 29th February 2020

  • Borrowers with up to INR 25 crores outstanding and INR 100 Crores Turnover eligible
  • Loans to have 4 year tenure with 12 months moratorium on Principal Repayment
  • Interest to be capped
  • 100% Credit guarantee cover to banks and NBFCs on Principal and Interest
  • Scheme can be availed till 31st October 2020
  • No Guarantee Fee and No Fresh Collateral required

Subordinate Debt – Stressed MSMEs

  • Government to facilitate INR 20,000 Crores as Subordinate Debt (Unsecure loan/debt that ranks below other loans with respect to claim on assets)
  • Two lakhs MSMEs likely to benefit
  • NPAs and Stressed MSMEs are eligible
  • Government will provide support of INR 4,000 Crores to CGTMSE, who in turn provide partial credit guarantee support to banks

Equity Infusion through Fund of Funds (FoF)

  • Fund of Funds with corpus of INR 10,000 Crores will be set up
  • Equity funding will be provided to MSMEs with growth potential and Viability
  • FoF will be operated through Mother Funds and few Daughter funds level
  • Fund Structure will help leverage INR 50,000 crore of funds at daughter funds level
  • Encourage MSMEs to get listed on main board of stock exchange

Other Measures

  • Global tenders will be disallowed in government procurement tenders upto INR 200 Crores to avoid unfair competition from foreign companies
  • MSME receivables from GoI and CPSES to be released in 45 days
  • E- market linkage for MSMEs to be promoted to act as a replacement for trade fairs and exhibition

New Definition

  • Earlier, MSME is defined based upon Investment in the category of Plant, Machinery and Equipment. However, criteria for classification of MSMEs has been changed on basis of Investment as well as the turnover
  • Distinguish between Manufacturing and services sector are eliminated
  • Investment Limit has been increased, along with cap in turnover


Employer and Employee Contribution Support

  • Liquidity Relief has been given to EPF Establishment
  • The Employer and Employee Contribution support given under Pradhan Mandhri Garib Kalyan package is extended for further three months upto August 2020. This scheme is applicable for 24% of the monthly wages into EPF accounts for wage earners below INR 15,000 per month, who are employed in establishments having up to one hundred employees, with 90% or more of such employees earning monthly wages less than INR 15,000 per month
  • This provides liquidity relief of INR 2,500 crores to 3.67 lakhs Enterprises and 72.22 lakhs Employees will benefit

     Statutory PF Rate reduction



  • The statutory PF of Employer and Employee contributions is reduced from 12% to 10% to all Organisation covered by EPFO for next 3 months. However for the State PSU and Central Govt Undertaking the employer will continue to pay 12%
  • This scheme is applicable for workers who are not eligible for 24% EPF Support under PM Garib Kalyan Package and its extension
  • This will provide liquidity support of INR 6,750 crores to employers and employees for next three months


  • Extension of upto 6 months (without costs to contractor) to be provided by all the Central Agencies (like Railways, Ministry of Road Transport and Highways, Central Public Works Department)
    • Covers construction / works and Goods and Services Contracts
    • Covers Obligations like completion of works, intermediate milestones, etc
  • Government agencies to partially release bank guarantees, to the extent contracts are partially completed, to ease cash flows


Special Liquidity Scheme

  • Government to launch special INR 30,000 Crores Special Liquidity Scheme
  • Under this Scheme, Investment will be made in both Primary and Secondary market transactions in investment grade debt paper of NBFCs/HFCs/MFIs
  • Securities will be fully guaranteed by Government of India

Partial Credit Guarantee Scheme (PCGS) 2.0

  • Existing PCGS scheme to be extended to cover borrowings such as primary issuance of Bonds/CPs (liability side of balance sheets) of such entities
  • First 20% of loss will be borne by the Guarantor i.e., Government of India
  • AA paper and below including unrated paper eligible for investment (esp. relevant for MFIs)
  • This scheme will result in liquidity support of INR 45,000 crores


  • Revenues of Power Distribution Companies (DISCOMs) have plummeted
  • Unprecedented cash flow problem accentuated by demand reduction
  • DISCOM payables to Power Generation and Transmission Companies is currently INR 94,000 crores
  • PFC/REC to infuse liquidity of INR 90,000 crores to DISCOMs against receivables
  • Linkage to specific activities/reforms: Digital payments facility by DISCOMs for consumers, liquidation of outstanding dues of State Governments, Plan to reduce financial and operational losses.
  • Central Public Sector Generation Companies shall give rebate to DISCOMS which shall be passed on to the final consumers (industries).


Extension of Registration and Completion Date of Real Estates projects under RERA

Ministry of Housing and Urban Affairs will advise States/UTs and their Regulatory Authorities to the following effect:

  • COVID-19 to be treated as ‘Force Majeure’ under RERA.
  • Extend the registration and completion date suo-moto by 6 months for all registered projects expiring on or after 25th March, 2020 without individual application.
  • Regulatory Authorities may extend this for another period of upto 3 months, if needed.
  • Issue fresh Project Registration Certificates automatically with revised timelines.
  • Extend Timelines for various statuary compliances under RERA concurrently.

These measures will de-stress real estate developers and ensure completion of projects so that homebuyers are able to get delivery of their booked houses with new timelines.


TDS and TCS Rate Reduction

In order to provide more funds at the disposal of the taxpayers, the rates of Tax Deduction at Source (TDS) for non-salaried specified payments made to residents and rates of Tax Collection at Source (TCS) for the specified receipts shall be reduced by 25% of the existing rates.

  • Payment for contract, professional fees, interest, rent, dividend, commission, brokerage, etc. shall be eligible for this reduced rate of TDS.
  • This reduction shall be applicable for the remaining part of the FY 2020-21 i.e. from tomorrow to 31st March, 2021.
  • This measure will release Liquidity of INR 50,000 crores.

Other Measures

  • All pending refunds to charitable trusts and non-corporate businesses & professions including proprietorship, partnership, LLP and Co-operatives shall be issued immediately.

Please download the PDF version of our publication available below to ascertain the Revised TDS/TCS Rate.




The FM’s speech puts in the nuts and bolts towards implementation of Aatma Nirbhar Bharat Vision and is the building block for PM’s appeal of “local going global”.

> Extensive support extended to MSME’s, DISCOMs, Real Estate Sector and Lending Institutions (Like NBFC’s, HFC’s) announced by the FM
> Liquidity Boost through Collateral Free Loans for MSME’s and Subordinate Debt
> Liquidity Boost also through reduced TDS and TDS rates
> Government participating in equity instruments of MSME’s through Funds of Funds ! – A new dimension to public private ownership
> Government participating in debt instruments of different grades
> New Definition of MSME’s enables the reach of the Economic Package to many more entities which were otherwise outside the Scheme.
> Relaxations in Compliances dates for Income Tax Filings for AY 2020-2021

Indian entrepreneurs should take benefits of these measures in their strides and aim turn this crisis into an opportunity. Startups are within in the contours of an MSME. Many of the above measures will benefit startups directly and indirectly. It is therefore imperative that they get recognized as MSME’s thorough a simple online process.


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