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Finance Minister, Nirmala Sitharaman has finally announced the complete details of the mega 20 lakh crore economic package. In the 1st installment of the announcement, the focus was on the relief to the MSME, NBFC and discom sector. Whereas, the 2nd installment was dedicated to the migrant workers, small farmers, street vendors and affordable housing. The Prime Minister had announced the ‘Atma Nirbhar Bharat’ package that will focus on making India self-reliant during his national address.

The finance minister said that the Atma Nirbhar Bharat rests on five pillars: Economy, Infrastructure, Technology-driven systems, Demography, and Demand. The focus will be on factors of production: Land, Labour, liquidity and Laws. The intention is to make local brands global.

Key Takeaways of the 1st Installment of Economic Package: Dedicated to MSME, NBFC Sectors, Power Discoms and Others 

  • Collateral free loan of Rs 3 lakh crores for MSMEs. This will benefit 45 lakh units so that they can resume work and save jobs.
  • For stressed MSMEs, Subordinate debt provision of Rs 20,000 cr has been announced for 2 lakh MSMEs. It will benefit those which are NPAs or stressed MSMEs.
  • Rs 50,000 crore equity infusion through Mother fund-Daughter fund for MSMEs that are viable but need hand-holding. A fund of funds with a corpus of Rs 10,000 crore will be set up to help these units expand capacity and help them list on Markets if they choose.
  • Definition of MSMEs has been revised to allow MSMEs to aim for expansion and not lose benefits. Also, there’ll be no distinction between manufacturing & services sector MSMEs.

New definition: Micro units with investment till Rs 1 cr, turnover up to Rs 5 crore. Small units with investment till Rs 10 cr, turnover up to Rs 50 cr. Medium units with investment till Rs 20 cr, turnover up to Rs 100 crore.

  • Global tenders will be disallowed up to Rs 200 crore for government contracts.
  • Will ensure e-market linkages are provided across the board in the absence of non-participation in trade fairs due to COVID. Govt of India and PSUs will clear all the receivables in the next 45 days.

For Employees

  • A liquidity relief of Rs.2,500 crore EPF support is being given to all EPF establishments, EPF contribution will be paid by Govt. of India for another 3 months till August and will benefit more than 72 lakh employees.
  • Statutory EPF contribution for all organisations and their employees covered by EPFO has been reduced to 10% from 12% earlier. This doesn’t apply to govt organisations. This will infuse Rs 6,750 cr liquidity into these organisations.


  • Rs 30,000 crore special liquidity scheme for investing in investment-grade debt papers of NBFCs, HFCs and MFIs. These NBFCs are those that are also funding MSMEs. These will be fully guaranteed by the government of India.
  • Rs 45,000 crore partial credit guarantee scheme 2.0 for NBFCs. The first 20% loss will be borne by the guarantor that is the government of India.

For Discom:  A one-time emergency liquidity injection of Rs 90,000 crore against all their receivables. The states will guarantee it.

Other Details

  • An extension of up to 6 months (without costs to contractor) to be provided by all Central Government Agencies like Railways, Ministry of Road Transport & Highways, Central Public Works Dept.
  • On real estate, the urban development ministry will issue advisory to states/UTs so that the regulators can invoke force majeure. The regulators can suo moto extend completion/registration dates for six months for projects expiring on or after March 25, 2020.
  • A reduction of 25% of existing rates of Tax Deducted at Source (TDS) & Tax Collection at Sources (TCS) from tomorrow till March 31, 2021. This will release Rs 50,000 crores.
  • Due date of all Income Tax Return filings extended from July 31 to November 30. Vivaad se Vishwas scheme extended till December 31,2020. Date of assessments getting barred as on Sep 30, 2020, extended to December 31, 2020. Date of assessments getting barred as on March 31, 2021, extended to September 30, 2021.

Key Takeaways of the 2nd Installment of Economic Package: Dedicated to Migrant Workers, Small Farmers, Street Vendors and Affordable Housing

Help for farmers and migrant workers in the Post-Covid period:

  • 3 crore marginal farmers availed loans at concessional rates. These 3 cr farmers had already benefited from Rs 4 lakh crore of loans given to them. The RBI moratorium has also benefited them.
  • Interest subvention and prompt repayment incentive on crop loans, due from March 1, extended up to May 31, 2020. 25 lakh new Kisan Credit Cards sanctioned with a loan limit of Rs 25,000 crore.
  • Central govt released Rs 11,002 crore in advance to states to augment the SDRF funds for helping states to set up shelters for migrant workers and provide them food.
  • 12,000 SHGs at urban centres comprising urban poor have produced 3 crore masks and 1,20,000 litres of sanitisers. 7,200 new SHGs of urban poor have been formed during the period starting March 15, 2020.
  • For migrant workers who have returned to their homes, work is being made available through MGNREGS. Till May 13, 14.62 cr person-days of work generated. Work offered to 2.33 crore wage seekers yesterday in 1.87 lakh gram panchayats. 40-50% more workers gave work compared to May last year. States have been advised to provide them with work. Annual expenditure till date is Rs 10,000 crore. Average wage rate has risen to Rs 202 from Rs 192 in the last fiscal.

Free Food for Migrants

For those migrants who don’t have NFSA cards or state cards, 5 Kgs of wheat or rice per person and 1 kg channa per family per month for next two months to be provided and it will reach through the state governments. This will entail Rs 3,500 crore and is likely to benefit around 8 crore migrants.

One Nation, One Ration Card

National Portability Ration Cards can be used in any ration shops that will be applicable across the country. By August 2020, 67 cr beneficiaries in 23 states or 83% of all PDS beneficiaries will get covered. By March 2021, 100% will be covered.

Rental Accommodation

Under PM Awas Yojana, a scheme for rental housing for migrant workers. Under the scheme incentives will be offered to private manufacturing units and industrial units to develop affordable housing, converting govt-funded houses into affordable renting accommodations for migrant workers. Shall be done on PPP on concessionaire basis. State government agencies will also be incentivised to develop affordable housing.

MUDRA Shishu Loan

Those who have availed loans up to Rs 50,000, an interest subvention of 2% for the next 12 months after the moratorium period extended by RBI ends. Three crore people will get the benefit of Rs 1500 crore.

Street Vendor

Special scheme for street vendors to avail Rs 5,000 crore loan facility. Will be given Rs 10,000 of working capital.

Affordable Housing

Credit-linked subsidy scheme for middle-income households in the income group Rs 6-18 Lakh extended to March 2021. The CLSS scheme was operationalised from May 2017 and extended up to March 2020. Now, it has been extended till March 2021. This will lead to investments of Rs 70,000 crore in housing and kickstart sectors like steel, cement and create jobs.

For Tribals

Rs 6,000 cr worth of proposals have come from states under CAMPA funds. Tribal people will get employment in forest management, wildlife protection/management and other forest related activities.

For Small/Marginal Farmers

The government is extending Rs 30,000 crore additional capital emergency funds through NABARD for post-harvest Rabi and Kharif related activities for small and marginal farmers.

PM Kisan Credit Card

Rs 2 lakh crore of concessional credit to boost farming activities and it will benefit 2.5 crore farmers. Those in animal husbandry and fisheries will also be included.