Hon’ble Prime Minister Shri Narendra Modi on May 12th, 2020, announced the Special economic and comprehensive package of Rs. 20 lakh crores – equivalent to 10% of India’s GDP – to fight COVID-19 pandemic in India. He gave a clarion call for Aatma Nirbhar Bharat or Self-Reliant India Movement. He also outlined five pillars of Aatma Nirbhar Bharat – Economy, Infrastructure, System, Vibrant Demography and Demand.

In the latest review taken by Smt Nirmala Sitharaman the following progress has been reported so far:

1. Global tenders will be disallowed in Government procurement tenders up to Rs 200 crore

Giving a major relief to the local MSMEs, Department of Expenditure has amended present Rule 161 (iv) of General Financial Rules, 2017 and GFR Rules relating to Global Tenders. Now, no Global Tender Enquiry (GTE) shall be invited for tenders up to Rs. 200 crore, unless prior approval is obtained from Cabinet Secretariat.

2. Relief to Contractors

It was announced by the Finance Minister that 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.

In this regard, Department of Expenditure has issued instructions that (due to COVID-19 pandemic) on the invocation of Force Majeure Clause (FMC), contract period may be extended  for a period not less than three months and not more than six months without imposition of any cost or penalty on the contractor/concessionaire. Instructions were also issued to return the value of performance security to the contractor/ suppliers proportional to the supplies made/ contract work completed to the total contract value. The same is being implemented by various Departments/Ministries.

3. Supporting State Governments

The Finance Minister announced that the Centre has decided to accede to the request and increase borrowing limits of States from 3% to 5%, for 2020-21 only in view of the unprecedented situation. This will give States extra resources of Rs. 4.28 lakh crore.

In an effort to support the financial position of the State Governments presently suffering from stress on account of revenue losses due to lock down, Department of Expenditure issued a communication to all the State Governments for additional borrowing of 2 per cent of projected GSDP to the States in 2020-21 subject to implementation of specific State Level Reforms.

4. Rs 3 lakh crore Collateral-free Automatic Loans for Businesses, including MSMEs

To provide relief to the business, additional working capital finance of 20% of the outstanding credit as on 29th 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 uptoRs. 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 lakh crore to more than 45 lak.

Following is the progress as on 9th July 2020:

5. Rs 45,000 crore Partial Credit Guarantee Scheme 2.0 for NBFCs

Existing Partial Credit Guarantee Scheme (PCGS) will be revamped and extended to cover the borrowings of lower rated NBFCs, HFCs and other Micro Finance Institutions (MFIs). Government of India will provide 20 per cent first loss sovereign guarantee to Public Sector Banks.

After the Cabinet approval on PCGS on 20.05.2020, Operational Guidelines for the Scheme were issued on 20.05.2020 itself. Banks have approved purchase of portfolio of Rs. 14,000 crore and are currently in process of approval/negotiations for Rs. 6,000 crore as on 3rd July 2020.

6. Rs 30,000 crore Additional Emergency Working Capital Funding for farmers through NABARD

New front loaded special refinance facility of Rs. 30,000 crore sanctioned by NABARD during COVID-19 to RRBs & Cooperative Banks. This special facility to benefit  3 crore farmers,  consisting mostly small and marginal farmers in meeting their credit needs for post-harvest and kharif sowing requirements. When kharif sowing is already on its full swing Rs. 24,876.87 crore out of Rs. 30,000 crore has been disbursed as on 06.07.2020, out of this special facility.

7. Rs 50,000 crore liquidity through TDS/TCS rate reduction

The Department of Revenue, vide its Press Release dated 13.05.2020, announced the reduction in TDS rates for specified payments to residents and specified TCS rates by 25% for transactions made from 14th May 2020 to 31st March 2021.

8. Other Direct Tax Measures