Boost for small businesses, better take home salaries in COVID 19 relief package

New Delhi : Private sector employees will be able to get higher take home salaries and small and medium-sized will be offered Rs 3 lakh crore in collateral-free bank loans, Finance Minister Nirmala Sitharaman announced on Wednesday. The government also changed the definition of MSMEs, recognising a larger number of businesses under the segment that can avail the benefits.

Union Finance Minister Nirmala Sitharaman on Wednesday announced details about the Rs 20 lakh crore relief package announced by PM Narendra Modi.

"We have a responsibility toward the poor, the needy, the migrants and the disabled," Ms Sitharaman said, in the first of several daily press conferences on the overall package, said to 10 per cent of India's GDP and focus on "Atma Nirbhar Bharat" or "self-reliant India".

She mentioned that the government wishes to help around 45 lakh businesses by October by providing credit guarantee via collateral free loans.

She unveiled a Rs 30,000 crore special liquidity scheme for non-banking financial institutions (NBFCs) and a Rs 45,000 crore partial credit guarantee scheme for NBFCs, housing finance companies (HFCs), and microfinance institutions (MFIs) with low credit rating.

For the next three months, the private companies will also be provided a 2 per cent relief on their contribution to the Employee Provident Fund (EPF) - a move likely to lead to a raise in take-home salaries for the employees.

Real estate companies will be able to claim relief from regulatory penalties for up to six months when completion of projects is delayed because of the coronavirus, Ms Sitharaman said.

While industry leaders have supported the moves, the opposition has raised questions on what is in the package for the migrants who have lost their jobs due to the coronavirus crisis and following lockdowns in the nation.