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15 measures to revive economy, big takeaways for MSMEs, NBFCs

The government has also extended the date of assessments getting barred on September 30, 2020 to December 31, 2020 and those getting barred on March 31, 2021 to September 30, 2021.

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Nirmala Sitharaman

New Delhi, May 13 : Union Finance Minister Nirmala Sitharaman has come out with 15 new and some enhanced measures to revive businesses, and support workers via fiscal incentives and regulatory easing under the mega stimulus package — Self-Reliant India Movement — which was announced by Prime Minister Narendra Modi on Tuesday evening.

On Wednesday, Sitharaman announced a slew of fiscal and regulatory measures for MSMEs, real estate, NBFCs, power distribution and general businesses.

She attempted to decrease the regulatory burden on companies, while increasing the take-home pay of employees via these measures.

In terms of takeaways, the biggest were for the MSME sector which is considered to be the backbone of economic activity.

As a major reform measure for the sector, the Centre has decided to give a new definition to MSMEs.

This will denote the type of companies that will be included in the sector.

Specifications wise, the investment limit for defining MSMEs has been revised upwards.

Besides, she highlighted that additional criteria such as turnover have been considered for defining MSMEs.

In terms of fiscal measures, the minister announced that Rs 3 lakh crore “collateral-free automatic loans” for businesses, including MSMEs, will be provided to meet operational liabilities built up, buy raw material and restart business.

She announced another scheme worth Rs 20,000 crore for “subordinate debt for stressed MSMEs”.

A Rs 50,000 crore ”Fund of Funds” for MEMEs, which face severe shortage of equity, was also announced.

The Centre has also decided not to go in for global bidding for government procurement for tenders up to Rs 200 crore, thereby, promoting the participation of MSMEs, she said.

Furthermore, e-market linkage for MSMEs will be provided and the CPSEs will pay all receivables to MSMEs within 45 days.

Besides MSMEs, a Rs 30,000 crore special liquidity scheme for non-banking finance companies (NBFCs), housing finance companies (HFCs) and micro-finance institutions (MFIs) was also announced.

This scheme will provide investments in both primary and secondary market transactions in “investment grade debt paper of these institutions”.

The minister said the scheme will support the previous initiatives of the government and the central bank to boost liquidity.

The securities under the scheme will be fully guaranteed by the Central government.

Further, the FM has also announced Rs 45,000 crore partial credit guarantee scheme for NBFCs.

Under this measure, first 20 per cent loss will be borne by the Centre, and even unrated papers will be eligible for investment, enabling NBFCs to reach out even to MSMEs in far-flung areas.

Additionally, a Rs 90,000 crore liquidity injection plan was announced for the financially stressed power distribution companies.

This plan will allow these entities to clear their dues towards power generation companies.

As per the plan, the liquidity window for discoms was essential as its revenue has plummeted and they are in the midst of unprecedented cash flow problem accentuated by demand reduction during the current lockdown.

The scheme will allow power sector financiers — PFC and REC — to infuse liquidity of Rs 90,000 crore to discoms against receivables.

Loans will be extended against state guarantees for exclusive purpose of discharging liabilities of discoms to gencos (power generation companies).

Apart from discoms, relief steps for the real estate industry were also announced.

The minister stated that the Union Ministry for Housing and Urban Affairs will issue advisory to states and Union Territories to declare the Covid-19 situation as a ”force majeure” under the Real Estate (Regulation and Development) Act.

With this move, the government has allowed suo-moto extension of the registration and completion date by six months for all registered project expiring on or after March 25, 2020 without individual applications.

Simultaneously, to give regulatory relief to businesses Sitharaman announced a six month extension of contracts for contractors by all central agencies and departments including railways, the Central Public Works Department, and Ministry of Road Transport & Highways.

The extension would not come with any cost for the contractors, she said.

This scheme covers construction works and goods and services contracts.

It also applies on obligations like completion of work, intermediate milestones and extension of concession period in public private partnership contracts.

The minister also announced that government agencies will partially release bank guarantees, to the extent contracts are partially completed, to ease cash flows.

Finally to provide more money into the taxpayers” hands, Centre decided to reduce the TDS (tax deduction at source) rates for non-salaried specified payments made to residents, and the TCS (tax collection at source) rates by 25 per cent for the specified receipts.

Sitharaman said the move would release Rs 50,000 crore liquidity.

As per the announcement, the reduced TDS rate will be applicable to the payment for contract, professional fees, interest, rent, dividend, commission and brokerage. It will be applicable for the remaining part of FY21 — from May 14 to March 31, 2021.

Speaking to the media, Finance Minister pointed out the due date of all income tax returns for FY 2019-20 will be extended from July 31, 2020, October 31, 2020 to November 30, 2020 and tax audit from September 30, 2020 to October 31, 2020.

The government has also extended the date of assessments getting barred on September 30, 2020 to December 31, 2020 and those getting barred on March 31, 2021 to September 30, 2021.

In another major move for businesses and charitable trusts, Sitharaman announced that all pending refunds to charitable trusts and non-corporate businesses and professions, including proprietorship, partnership, LLP and co-operatives, shall be issued immediately.

In addition, she announced further extension of the deadline for settling tax disputes under the ”Vivad se Vishwaas” scheme without paying any interest and penalty to December 31, 2020 from June 30, 2020.

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Coronavirus crisis may get ‘worse and worse and worse’, warns WHO

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Tedros Adhanom Ghebreyesus WHO

GENEVA : The raging coronavirus pandemic has the potential to get far worse if all nations do not adhere to basic healthcare precautions, the World Health Organization (WHO) warned on Monday.

“Let me be blunt, too many countries are headed in the wrong direction, the virus remains public enemy number one,” Director General Tedros Adhanom Ghebreyesus told a virtual briefing from WHO headquarters in Geneva.

“If basics are not followed, the only way this pandemic is going to go, it is going to get worse and worse and worse. But it does not have to be this way.”

Infections rose above 13 million across the world on Monday, according to a Reuters tally, climbing by one million in just five days in a pandemic that has killed more than half a million people.

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Global coronavirus infections top 13 million

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RUSSIA CORONAVIRUS

Worldwide coronavirus infections passed 13 million on Monday, according to a Reuters tally, marking another milestone in the spread of the disease which has killed more than half a million people in seven months.

The first case was reported in China in early January and it took three months to reach one million cases. It has taken just five days to climb to 13 million cases from 12 million recorded on July 8.

The number of cases is around triple that of severe influenza illnesses recorded annually, according to the World Health Organization.

There have been more than 568,500 deaths linked to the coronavirus so far, within the same range as the number of yearly influenza deaths reported worldwide. The first death was reported on Jan. 10 in Wuhan, China, before infections and fatalities surged in Europe and then later in the United States.

Many hard-hit countries are easing lockdowns put in place to slow the spread of COVID-19. Other places, such as the Australian city of Melbourne, are implementing a second round of shutdowns.

The Reuters tally, which is based on government reports, shows the disease is accelerating the fastest in Latin America. The Americas account for more than half the world’s infections and half the deaths.

The United States reported a daily global record of 69,070 new infections on July 10. In Brazil, 1.86 million people have tested positive, including President Jair Bolsonaro, and more than 72,000 people have died.

India, the country with the third-highest number of infections, has been contending with an average of 26,000 new infections each day since the beginning of July.

In countries with limited testing capacity, case numbers reflect only a proportion of total infections. Experts say official data likely under-represents both infections and deaths.

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Rail Bhawan shut for 2 days after officials test Covid positive

However, if there is specific urgency that requires an official to attend office, specific directives will be given to the official concerned, the ministry said.

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Rail Bhawan

New Delhi, July 13 : The Railways Ministry will remain closed for the next two days as a matter of “precaution” after some officials were found to be positive for coronavirus, an official statement said on Monday.

“Some officials of the Railway Board have tested Covid positive during the rapid antigen testing camp organised at Rail Bhawan on 9th, 10th and 13th July, 2020. Accordingly it has been decided to close all offices at Rail Bhawan on 14th and 15th July, 2020 to carry out intensive sanitisation of rooms and common area,” read a circular issued by the Ministry.

During these two days, all officials will work from home. They are also asked to remain available not only through phone but other electronic means of communication.

However, if there is specific urgency that requires an official to attend office, specific directives will be given to the official concerned, the ministry said.

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