India Inc. on Wednesday heaved a sigh of relief as finance minister Nirmala Sitharaman announced 16 relief measures totalling ₹9.5 trillion.
The measures, which include relief for micro, small, and medium enterprises (MSMEs) and tax relief for individuals and corporates, will not just address the supply chain constraints but also boost demand, according to India Inc.
About 4.5 million small businesses are likely to benefit from the ₹3 trillion collateral-free automatic loans.
Stressed MSMEs will be given ₹20,000 crore for support.
Limits on turnover and capital will be increased to help MSMEs benefit from their existing benefits as they grow. For government procurement, only Indian companies will be allowed in tenders worth up to ₹200 crore.
The government also said that it will clear pending payments of MSMEs in the next 45 days.
The steps also included reduction in tax deducted at source (TDS) and tax collection at source rates for non-salaried resident taxpayers, immediate granting of refunds for non-corporate taxpayers, and extension of due dates for filing direct tax returns and completing tax assessments and extension of the Vivad Se Vishwas dispute resolution scheme.
These measures will help small and micro vendors, said Arjun Ranga, managing partner at NR Group and managing director of Cycle Pure Agarbathies, an MSME. “Our duty now is to ensure that they get these reliefs and are able to come back to business as soon as possible. As the TDS has been reduced, people will have more money to spend."
The measures announced on Wednesday by Sitharaman will provide MSMEs a big boost, said Pawan Goenka, managing director of Mahindra and Mahindra Ltd. “These measures should go a long way in strengthening MSMEs beyond covid-19. Public procurement and receivable clearances are big steps," he said on Twitter.
The steps would give a big boost to the MSME sector, which has been under severe stress due to the lockdown, according to the Automotive Component Manufacturers Association of India (Acma).
Of the 850 members of Acma, 45% fall under the MSME category.