Rs 20 Lakh crore Economic Package: MSME, EPF, NBFC, MFI, Real Estate Benefited

The Government of India had earlier launched Pradhan Mantri Garib Kalyan Yojana. Under which Rs 1.7 lakh crore was allocated.

The Lock Down 4.0 that is to be launched on May 18, 2020 will operate under Atma Nirbhar Bharat Abhiyan.


Under the new scheme, the Finance Minister Nirmala Sitaraman announced 15 different measures. Of these,

  • Six measures are for the MSMEs
  • Two for Employment Provident Funds
  • Two for NBFCs (Non-Banking Financial corporation)
  • Two for MFIs (Micro Finance Institutions)
  • One to real estate
  • One for DISCOMs
  • Three related to Tax
  • One for the Contractors


1. Collateral free loans

The loans that are worth Rs 3 lakh crore are made collateral free. This is extended to firms whose outstanding loans are Rs 25 crore or those firms whose annual turn over is Rs 100 crore.

Also, these firms will not require new collaterals. Through this step around 45 lakh units will be benefitted

2. Stressed MSMEs

Through debt-based scheme, Rs 20,000 crore is being infused in to the economy. This will help to benefit stressed MSMEs. These stressed MSMEs are those facing equity problems.

Under this GoI will provide Rs 4,000 core separately through CGTMSE (Credit Gurantee Fund Trust for Micro and Small Enterprises). This will help benefit 2 lakh people that are dependent on stressed MSMEs.

The Non-Performing Assets are also eligible to claim as beneficiary under the scheme.

3. Fund of Funds

The GoI is to infuse Rs 50,000 crore by creating fund of funds. This will help those MSMEs that are viable and eligible. A corpus of Rs 10,000 crore is to be infused through mother fund and daughter fund framework.

4. Changed Definition of MSME

The GoI has changed the definition of MSMEs. The new definition has increased the investment limit upwards. Previously, an enterprise with investment up to Rs 25 lakh was called a micro unit. Under the new definition, a firm upto investment of Rs 1 crore is to be called Micro unit, of Rs 10 crore is to be called as small unit and investment greater than Rs 20 crore will be called as medium unit

Also, earlier, only investment was used to define MSMEs. With the changed definition both investment and turn over is used to define MSMEs. Under the new definition a firm with turn over of Rs 5 crore is to be called a micro unit, of Rs 50 crore will be called as small unit and turn over greater than Rs 100 core is to be called as Medium unit.

It is to be noted that for an enterprise to come under the category of MSME it has to fulfill both investment and turn over conditions.

Also, under the new definition, the differentiation between the manufacturing and service based MSMEs are being removed.

5. Global Tenders

Global tenders will be disallowed in government procurement for tenders upto Rs 200 crores. This is because majority of MSME were unable to supply large companies. Indian MSME were not able to compete global tenders. This will now help achieve self reliant India.

6. E-Market

The E-Market Linkages are to be strengthened. This is being done as the COVID-19 crisis has made it highly challenging to conduct trade fairs, exhibitions, etc. Therefore, the MSMEs have to search online ways to promote their products. Thus, boosting E-market facilities will help them achieve this.


  • Today, under Employment Provident Fund scheme, 12% is contributed by the employee and 12% by the employer. Liquidity relief is to be provided to all EPF establishments. GoI will infuse Rs 2,500 crores to achieve this. Under this 6.3 lakh establishements will be benefitted.
  • To increase take home salary, for those not covered under earlier, Statutory PF contribution reduced from 12% to 10%.


  • In order to help the struggling Non Banking Financial Corporations, Rs 30,000 crore liquidity is being injected. This will help NBFCs serve the MSMEs better.
  • Also, Rs 45,000 crores is to be infused through Partial Guarantee Scheme 2.0. Under this scheme, the GoI will bear the first 20% loss.


  • The Discoms are highly affected due to COVID-19 crisis. Therefore, liquidity of Rs 90,000 crore is to be injected.


The contracts under Transport, Railway sectors, etc will be instructed to extend by 6 months.

Real Estate (RERA Projects)

The urban development ministry will issue advisory to states and UTs to instru the regulatory authority upon bringing upon smooth functioning of the real estate sector. The pending projects shall be extended till 6 months. Also, registration dates shall be extended by 6 months.


  1. TDS and TCS rates are to be reduced by 25%. This will last till March 2021. This will help in retaining Rs 50,000 crore within the hands of the people.
  2. All pending refunds to non-corporate business, trusts, LLPs, proprietorships, are to be done immediately.
  3. The due date of income tax returns are to be extended to 30 November 2020.
  4. Date of Assessments getting barred as on 30th Sep 2020 is extended to 31st December 2020.
  5. The deadline of Vivad Se Vishwas Scheme is postponed to 31st December 2020.


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