Atmanirbhar campaign: Government announces ₹5.5 lakh crore for MSMEs

Team Suno Neta Wednesday 13th of May 2020 10:13 PM

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Nirmala Sitharaman.

New Delhi: A day after the prime minister, Narendra Modi, announced a ₹20 lakh crore stimulus package to boost the coronavirus-hit economy, the government unveiled the first plan on Wednesday. It focuses on putting life into the micro, small and medium enterprises of the country.

The MSMEs are considered to be the bedrock of the country’s economy and the second-highest employer after agriculture.

The Union finance minister, Nirmala Sitharaman, in a media briefing, spelled out the details of how the first instalment of over ₹5.5 lakh crore the ₹20 lakh crore package will be used. Out of the ₹5.5 lakh crore, Sitharaman announced a ₹3 lakh crore worth of collateral-free automatic loans for MSMEs in the form of credit guarantee as a part of the Atmanirbhar Bharat Abhiyan (self-reliance campaign) campaign announced by the prime minister, on Tuesday. This will encourage the banks to give loans to the businesses and MSMEs who can’t offer enough collateral on loans required to revive and run their business. Now, in case the business falters on repaying loans, the government will pay the bank.

The MSME sector, which was just recovering from the November 2016 demonetization of the ₹500 and ₹1000 banknotes has been hit the hardest due to the lockdown. This has resulted in millions of migrant labourers losing their jobs and stranded in cities with little or no food or money. This has resulted in hundreds of thousands of them embark on perilous journeys back to their native places with no public transport services running.

The other major announcement the finance minister made was on the contribution of employers on employees’ provident fund. Sitharaman announced a reduction in the employers’ contribution on employees’ provident fund and extended the scheme introduced as part of the Prime Minister’s Garib Kalyan Yojana by three months, under which the government contributes 12 per cent of salary each on behalf of both the employer and the employee to the EPF for those earning less than ₹15,000 per month in units with less than 100 workers.

Full video of Nirmala Sitharaman’s announcement of the first details of the stimulus package:

India Covid-19 cases cross 78,000

India saw its coronavirus cases cross the 78,000-mark on Wednesday. It recorded 3,763 new Covid-19 cases and 136 new deaths due to the disease in the last 24 hours.

Meanwhile, the number of global coronavirus cases has crossed 4.4 million and the death toll due to the virus is now close to 300,000. The situation in the United States looks particularly grim as the number of Covid-19 infections in the country has now crossed 1.42 million and the death toll is now nearly 85,000.

Latest global coronavirus stats from Johns Hopkins Center for Systems Science and Engineering

Latest coronavirus India stats: