COVID 19 Relief Economic package focuses extensively on supporting MSMEs a comprehensive relief package of Rs 20 lakh Crore as announced by Prime Minister Mr. Narendra Modi on 12 May 2020

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Economic relief package by Govt. Of India
COVID 19 Economic Relief Package



  • Finance Minister Nirmala Sitharaman has on 13 May 2020 detailed about stimulus package announced by PM Narendra Modi  of Rs 20 lakh crore or 10 per cent of the Gross Domestic Product (GDP).
Economic Relief Package
Extensive  support to MSME

  • This package will exclusively have attention on MSME sector.
  • Prime Minister announced a comprehensive relief package of rupees 20 crore, which is about 10% of the GDP of India.
  • Six months extension to construction, Goods and service sector contract contractors will be allowed.
  • Government announces liquidity injection of puppies, 90,000 crore. Which is one time provision for infusion of money against their receivables.
  • Government also announces rupees 40,000 crore liquidity infusion to a partial credit guarantee scheme for NBFCs. The first 20% loss will be borne by the Government of India, who has guaranteed in this case.
  • Government announces Rs. 30,000, crore Special liquidity scheme. This will provide liquidity support for NBFC's, HFC, MFIs and mutual fund to create confidence in the market.

Reduced EPF Contribution 
  • Rupees 6750 crores liquidity support is available to the employees to increase the take home salary, where government will continue to continue 12% PF contribution. But employee can give only 10%. This will continue for next three months.
  • Government also extends liquidity relief for all EPF establishments of rupees 2500 crore.
  • In post COVID world. There will be absence of trade fairs and exhibitions. In this situation, and a market linkage will be provided to all MSMEs, to ensure that they can present in these market, as an supplement the fairs and exhibitions..
  • Another announcement is combat to the cheaper, global products, where government announces that for rupees 200 crores will be, the global tendering will not be available. Hence that will not go to global route or global tendering, and where India can make or serve as making India project.
New definition of MSME
New definition of MSME

  • Redefinition of MSMEs will help small units in India, where,an investment, up to rupees one crore can be categorized as micro unit, and they can achieve a turnover, up to rupees five crore. Still, they will be categorized as micro unit.
Redefined MSME
  • MSMEs hand holding package is also announced by government of rupees 50,000 crore where fund of funds will be governed to extend support to MSME Enterprises by capital contribution by this a subordinate debt will be provided to 20 lakh stressed MSMEs.
Equity Infusion 


  • The government has also announced, rupees three lakh crore of collateral free automatic loan for MSMEs, where an MSME can avail this loan. Even such MSME may have outstanding loan of, rupees 25 crore or with a turnover of rupees hundred crore. In the loan, it will have hundred percent credit guarantee. And a moratorium of 12 months. This will enable 25 lakh MSME units to continue their business activities, and safeguard the job of their employees.
Subordinate Debt

  • The loan have a four year tenor, and 12 months on principle repayment and the interest will be capped. And loan can be available till 31st October, 2020, no guarantee fee. No, fresh collateral.
Due date of all Income Tax Returns for FY 2019-20 to be extended from 31st July, 2020 to 30th November, 2020. Date for Tax Audit Reports also to be extended. 

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