Special Economic and Comprehensive Relief Package

Hon’ble Prime Minister Shri Narendra Modi announced a Special economic and comprehensive package of Rs 20 lakh crores plus- equivalent to 10% of India’s GDP to support Indian Economy’s fight against COVID-19. He emphasized on a Self-Reliant India Movement/ Aatma Nirbhar Bharat. He also outlined five pillars of Aatmanirbhar Bharat – Economy, Infrastructure, System, Vibrant Demography and Demand.

In continuation of Hon’ble PM’s announcement, The Finance Minister announced the details of this package in 5 tranches in 5 days (May 13-17). The focus of the measures was to support Indian Economy’s fight against COVID-19 and ‘Getting back to work’ by providing various reliefs and credit support related to businesses especially MSMEs. The Finance ministry not only announced and allocated funds for various welfare schemes for employees, workers, migrant workers and poor but also announced various effective schemes for the benefit of businesses especially MSME, farmers, animal husbandry & other similar activities, Financial sector, Power Sector & Housing Sector etc.

A detailed break-up of the whole package and a brief on every scheme announced is as follows:


Allocation/schemeDetail of Allocation/schemeAmount Rs in Cr% of total Package
Emergency Working
Capital Facility for Businesses, including MSMEs


1. MSMEs & Mudra Loans
(Borrowers under PMMY reported on the MUDRA portal). Definition of MSME revised and now every entity into manufacturing OR service activity with an investment in plant and machinery up to Rs.20 Cr AND turnover up to Rs.100 Cr shall be treated as MSME.

2. Total borrowing of borrowers from all banks/FIs should not be > 25 Cr excluding off-balance sheet and non-fund-based exposures as on
February 29, 2020.

3. Such accounts should be regular, SMA-0, SMA-1 as on February 29, 2020 (NPA and SMA-2 accounts
are not eligible).
Quantum of facility: Maximum 20% of the outstanding credit. Max Cap is Rs.5.0 Cr each borrower.
Security: No additional collateral from the entity (100% guaranteed by Govt of India
The tenor of the facility - 4 Years which includes one-year Principal Moratorium.
Scheme Validity up to -October 31, 2020
Interest Capping: 9.25 per cent for banks, and at 14 per cent in the case of NBFCs
Note: This will work like a pre-approved facility for all entitled borrowers under the

Subordinate Debt for
Stressed MSMEs
MSMEs who are NPA or
stressed will get
subordinated debt from banks equal to 15% of his existing stake subject to a max Rs.75 Lakhs. This facility will be guaranteed by
Govt of India.
Equity infusion through
MSME Fund of Funds
Govt to set up a fund of funds to give equity funding support to MSMEs.
Employees Provident Fund
Support for business and organized workers
The scheme introduced as part of PMGKP under which the Government of India contributes 12% of salary each on behalf of both employer and employee to EPF will be extended by another 3 months for salary months of June, July and August 2,5000.12
Reduction in EPF ratesStatutory PF contribution of both employer and employee reduced to 10% each from the existing 12% each for all establishments covered by EPFO for the next 3 months.

Reduction in Rates of ‘Tax Deduction at Source’ and ‘Tax Collected at Source'
The TDS rates for all non- salaried payment to residents and tax collected at source rate will be reduced by 25 per cent of the specified rates for the remaining period of FY 20-21.
For Example, there is a TDS deduction @ 10% on payment of a professional fee. Now, TDS shall be deducted @7.5% which will an additional liquidity of 2.5% in the hand of professional. Similarly, all the TDS rates except salary have been reduced by 25%.

Interest Subvention for Shishu MUDRA loaneesGovernment of India will provide Interest subvention of 2% for prompt payees for a period of 12 months to MUDRA Shishu loanees, who have loans
below Rs 50,000
1,500 0.07
Credit facility for Street Vendors
Under this scheme, a bank credit facility for initial working capital up to Rs. 10,000/- for each street vendor will be extended to restart his/her business. This scheme will cover urban as well as rural vendors doing business in the adjoining urban areas.
Viability Gap Funding Scheme
In order to boost private sector investment in Social Infrastructure, the Government will enhance the quantum of Viability Gap Funding (VGF) up to 30% each of Total Project Cost as VGF by the Centre and State/Statutory Bodies. For other sectors, VGF existing support of 20 % each from Government of India and States/Statutory Bodies shall continue.


Banks & Financial Institutions

Allocation/schemeDetail of Allocation/schemeAmount Rs in Cr% of total Package
Special Liquidity Scheme for NBFC/HFC/MFIs
Investment will be made in primary and secondary market transactions in investment grade debt paper of NBFCs, HFCs and MFIs. This will be 100 percent guaranteed by the
Government of India.
30,000 1.42
Partial credit guarantee Scheme 2.0 for Liabilities of NBFCs/MFIs
Existing Partial Credit Guarantee scheme is being revamped and now will be extended to cover the borrowings of lower rated NBFCs, HFCs and other Micro Finance Institutions (MFIs). Government of India will provide 20 percent first loss sovereign guarantee to Public Sector Banks.

RBI Liquidity measures
as announced earlier
This includes various liquidity
infusion measures like reduction in policy rates like CRR, repo and reverse repo rates, liquidity Capital ratio, Marginal standing facility along with Targeted Long Term Repos Operations and allowing 3 months moratorium from March'20-May'20 for payment of interest on working capital & EMI on Term Loan Borrowers etc.
Note: Interest and EMI Moratorium further extended for another 3 months i.e. August 31, 2020 by RBI on May 22, 2020 after announcing of this package. It is further decided that in order to ameliorate the difficulties faced by borrowers in repaying the accumulated interest for the deferment period on working capital facilities in one shot, lending institutions are permitted to convert the accumulated interest on working capital facilities over the deferment period (up to
August 31, 2020) into a funded interest term loan which shall be repayable not later than the end of the current financial year (i.e., March 31, 2021).


Allocation/schemeDetail of Allocation/schemeAmount Rs in Cr% of total Package
Liquidity Injection for DISCOMsPower Finance
Corporation and Rural Electrification Corporation will infuse liquidity in the DISCOMS in two equal instalments. This amount will be used by DISCOMS to pay their dues to Transmission and Generation companies.
90,000 4.25


Allocation/schemeDetail of Allocation/schemeAmount Rs in Cr% of total Package
Credit Linked subsidy Scheme for MIG under PMAY(Urban)

The Credit Linked Subsidy Scheme for Middle Income Group (annual Income between Rs 6 and 18 lakhs) will be extended up to March 2021.


Agriculture, Animal Husbandry and other Similar activities

Allocation/schemeDetail of Allocation/schemeAmount Rs in Cr% of total Package
Scheme for Formalization of Micro Food Enterprises (MFE)A Scheme promoting vision of Prime Minister

Shri Narendra Modi: ‘Vocal for Local with Global outreach’ will be launched to help 2 lakh MFEs who need technical upgradation to attain FSSAI food standards, build brands and marketing. Existing micro food enterprises, Farmer Producer Organizations, Self Help Groups and Cooperatives to be supported. The focus will be on women and SC/ST owned units and those in Aspirational districts and a Cluster based approach (e.g. Mango in UP, Tomato in Karnataka, Chilli in Andhra Pradesh, Orange in Maharashtra etc.) will be followed.
Credit boost to 2.5 crore farmers under Kisan Credit Card cheme
A special drive to provide concessional credit to PM-KISAN beneficiaries through Kisan Credit Cards. Fisherman and Animal Husbandry Farmers will also be included in this drive.
Additional Emergency Working Capital for farmers through NABARDNABARD will extend additional re-finance support for meeting crop loan the requirement of Rural Cooperative Banks and RRBs.30,000

Agri Infrastructure Fund for farm-gate infrastructure for farmers
This facility will be provided for funding
Agriculture Infrastructure Projects at farm-gate &aggregation points (Primary Agricultural Cooperative Societies, Farmers Producer Organizations, Agriculture entrepreneurs, Start-ups, etc.
Scheme for fishermen through Pradhan Mantri Matsya Sampada Yojana (PMMSY)The Government will launch the PMMSY for integrated, sustainable, inclusive development of marine and inland fisheries. Rs 11,000 crore for activities in Marine, Inland fisheries and Aquaculture and Rs. 9000 crore for Infrastructure - Fishing Harbors, Cold chain, Markets etc shall be provided. Cage Culture, Seaweed farming, Ornamental Fisheries as well as New Fishing Vessels, Traceability, Laboratory Network etc. will be key activities. There will be provisions of Ban Period Support to fishermen (during the period fishing is not permitted), Personal & Boat Insurance. This will lead to Additional Fish Production of 70 lakh tones over 5 years, Employment to over 55 lakh persons and double the exports to Rs 1,00,000 crore. The focus will be on Islands, Himalayan States, North-east and Aspirational Districts.20,0000.95
Animal Husbandry
Development Fund
This fund will be set up with an aim to support private investment Processing, the value in Dairy addition and cattle feed infrastructure. Incentives will be given for establishing plants for the export of niche products.15,000

Promotion of Herbal Cultivation
The National Medicinal Plants Board (NMPB) has supported 2.25 area under lakh hectare cultivation of medicinal plants. 10,00,000 hectare will be covered under Herbal cultivation in the next two years. This will lead to Rs. 5,000 crore income generation for farmers. There will be a network of regional Mandis for Medicinal Plants. NMPB will bring the 800-hectare area by developing a corridor of medicinal plants along the banks of Ganga.4,000

Beekeeping initiativesThis scheme is for Infrastructure development related to Integrated Beekeeping Development Centres, Collection, Marketing and Storage Centres, Post- Harvest &value Addition facilities etc; Implementation of standards & Developing traceability system Capacity building with thrust on women: Development of quality nucleus stock and bee breeders.500

From ‘TOP’ to TOTAL“Operation Greens” run by Ministry of Food Processing Industries (MOFPI) will be extended from tomatoes, onion and potatoes to ALL fruit and vegetables. The Scheme would provide 50% subsidy on transportation from surplus to deficient markets, 50% subsidy on storage, including cold storages and will be launched as a pilot for the next 6 months and will be extended and expanded.500

National Animal Disease Control Programme
National Animal Disease Control Programme for Foot and Mouth Disease (FMD) and Brucellosis launched to ensure 100% vaccination of cattle, buffalo, sheep, goat and pig population (total 53 crore animals) for Foot and Mouth
Disease (FMD) and for brucellosis.


Welfare schemes

Allocation/schemeDetail of Allocation/schemeAmount Rs in Cr% of total Package
Free food grains supply to migrants
For the migrant labour, additional
food grain to all the States/UTs at the rate of 5 kg per migrant labourer and 1 kg Chana per family per month for two months i.e. May and June, 2020 free of cost shall be allocated.

Additional allocation for
It will help generate nearly 300 crore person
days in total addressing need for more work including returning
migrant workers in
Monsoon season as well. Creation of
larger number of durable and livelihood assets
including water conservation assets
will boost the rural economy through higher production

Earlier measures
including PMGKY

(Announced since March'20)
This includes various welfare schemes including Employees Provident Fund Support for Business and organized workers announced since March'20.1,92,800

Creating employment using CAMPA fundsThis fund under Compensatory Afforestation Management &Planning Authority (CAMPA) will be used for Afforestation and Plantation works, including in urban areas, Artificial regeneration, assisted natural regeneration, Forest management, soil & moisture conservation works, Forest protection, forest and wildlife related
infrastructure development, wildlife protection and management etc.

Total21,16,096 100

OTHERS major reforms announced in the package as below:

  1. No Global tenders for Government tenders of up to Rs 200 crores.
  2. Relief to Contractors: All central agencies like Railways, Ministry of Road Transport and Highways and CPWD will give an extension of up to 6 months for completion of contractual obligations, including in respect of EPC and concession agreements.
  3. Relief to Real Estate Projects: State Governments are being advised to invoke the Force Majeure clause under RERA. The registration and completion date for all registered projects will be extended up to 6 months and maybe further extended by another 3 months based on the State’s situation. Various statutory compliances under RERA will also be extended concurrently.
  4. Further enhancement of Ease of Doing Business through IBC related measures:
    • The minimum threshold to initiate insolvency proceedings has been raised to Rs. 1 crore (from Rs. 1 lakh, which largely insulates MSMEs).
    • Special insolvency resolution framework for MSMEs under Section 240A of the Code will be notified soon.
    • Suspension of fresh initiation of insolvency proceedings up to one year, depending upon the pandemic situation.
    • Empowering Central Government to exclude COVID 19 related debt from the definition of “default” under the Code for the purpose of triggering insolvency proceedings.
  5. Decriminalization of Companies Act defaults Violations involving minor technical and procedural defaults such as shortcomings in CSR reporting, inadequacies in Board report, filing defaults, delay in holding of AGM. The Amendments will de-clog the criminal courts and NCLT. Seven compoundable offences altogether dropped and 5 to be dealt with under the alternative framework.
  6. E-market linkage for MSMEs will be promoted to act as a replacement for trade fairs and exhibitions. MSME receivables from Government and CPSEs will be released in 45 days.
  7. Tax Relief: The due date of all Income Tax Returns for Assessment Year 2020-21 will be extended to 30 November 2020. Similarly, tax audit due date will be extended to 31 October 2020. The date for making payment without additional amount under the “Vivad Se Vishwas” scheme will be extended to 31 December 2020.
  8. Ease of Doing Business for Corporates: Key reforms under ‘Ease of doing business’ initiatives include:
    • Direct listing of securities by Indian public companies in permissible foreign jurisdictions.
    • Private companies which list NCDs on stock exchanges not to be regarded as listed companies.
    • Including the provisions of Part IXA (Producer Companies) of Companies Act, 1956 in Companies Act, 2013.
    • Power to create additional/ specialized benches for NCLAT and
    • Lower penalties for all defaults for Small Companies, One-person Companies, Producer Companies & Start-ups.
  9. Immediate Pending Refund Processing: The pending income tax refunds to charitable trusts and non-corporate businesses and professions including proprietorship, partnership and LLPs and cooperatives shall be issued immediately.
  10. Health Reforms & Initiatives: Public Expenditure on Health will be increased by investing in grass-root health institutions and ramping up Health and Wellness Centres in rural and urban areas. Setting up of Infectious Diseases Hospital Blocks, in all districts, strengthening of lab network and surveillance by Integrated  Public Health Labs in all districts & block level Labs & Public Health Unit, National Institutional Platform for One health by ICMR for research, National Digital Health Blueprint under the National Digital Health Mission are some other initiatives to be implemented.
  11. Technology Driven Education with Equity post-COVID: PM eVIDYA, a Programme for multi-mode access to digital/online education, Manodarpan, an initiative for psycho-social support for students, teachers and families for mental health and emotional well-being, New National Curriculum and Pedagogical framework for school, early childhood and teachers and National Foundational Literacy and Numeracy Mission for ensuring that every child attains Learning levels and outcomes in grade 5 by 2025 to be launched/implemented.
  12. Public Sector Enterprise Policy for a New, Self-reliant India: Government will announce a new policy whereby -1. List of strategic sectors requiring the presence of PSEs in the public interest will be notified. 2. In strategic sectors, at least one enterprise will remain in the public sector but the private sector will also be allowed. In other sectors, PSEs will be privatized (timing to be based on feasibility etc.) & 3. To minimize wasteful administrative costs, the number of enterprises in strategic sectors will ordinarily be only one to four; others will be privatized/ merged/ brought under holding companies
  13. Support to State Governments: Centre has decided to increase the borrowing limits of states from 3% to 5% for 2020-2021 only. This will give States extra resources of Rs. 4.28 lakh crore.
  14. Coal Sector Reforms:
    1. Commercial Mining in Coal Sector:
      1. The Government will introduce competition, transparency and private sector participation in the Coal Sector through:
        • A revenue sharing mechanism instead of a regime of fixed Rupee/tonne. Any party can bid for a coal block and sell in the open market.
        • There will be exploration-cum-production regime for partially explored blocks against the earlier provision of the auction of fully explored coal blocks.
        • Production earlier than scheduled will be incentivized through rebate in revenue- share.
    2. Diversified Opportunities in Coal Sector
      • Coal Gasification / Liquefication will be incentivized through rebate in revenue share. This will result in a significantly lower environmental impact and also assist India in switching to a gas-based economy. Infrastructure development of Rs. 50,000 crore will be done for the evacuation of enhanced Coal India Limited’s (CIL) target of 1 billion tons of coal production by 2023-24 plus coal production from private blocks. This will include Rs 18,000 crore worth of investment in the mechanized transfer of coal (conveyor belts) from mines to railway sidings.
    3. Liberalised Regime in Coal Sector
      • Coal Bed Methane (CBM) extraction rights will be auctioned from Coal India Limited’s (CIL) coal mines. Ease of Doing Business measures, such as Mining Plan simplification, will be taken. This will allow for an automatic 40% increase in annual production. Concessions in commercial terms given to CIL’s consumers (relief worth  Rs 5,000  crore offered). Reserve price in auctions for non-power consumers reduced, credit terms eased, and lifting period has been enhanced.
  15. Mineral Sector: Private Investments in the Mineral Sector will be enhanced. The same will be achieved by Introduction of a seamless composite exploration-cum- mining-cum-production regime, auction of 500 mining blocks and Joint Auction of Bauxite and Coal mineral blocks etc. The distinction between captive and non-captive mines to allow the transfer of mining leases and sale of surplus unused minerals, leading to better efficiency in mining and production shall be removed. Ministry of Mines is in the process of developing a Mineral Index for different minerals. There will be the rationalization of stamp duty payable at the time of award of mining leases.
  16. Defence Sector Reforms:
    • Enhancing Self Reliance in Defence Production ‘Make in India’ for Self-Reliance in Defence Production will be promoted by notifying a list of weapons/platforms for a ban on import with year-wise timelines, Indigenization of imported spares, and separate budget provisioning for domestic capital procurement. This will help reduce the huge Defence import bill. It is further proposed to improve autonomy, accountability and efficiency in Ordnance Supplies by Corporatization of Ordnance Factory Board.
    • Policy Reforms in Defence Production FDI limit in the Defence manufacturing under automatic route will be raised from 49% to 74%. There will be a time-bound defence procurement process and faster decision making will be ushered in by setting up of a Project Management Unit (PMU) to support contract management; Realistic setting of General Staff Qualitative Requirements (GSQRs) of weapons/platforms and overhauling Trial and Testing procedures.
  17. Civil Aviation Sector reforms
    • Efficient Airspace Management for Civil Aviation: Restrictions on the utilization of the Indian Air Space will be eased so that civilian flying becomes more efficient. This will bring a total benefit of about Rs 1,000 crore per year for the aviation sector. This will lead to optimal utilization of airspace; reduction in fuel use, time and will have a positive environmental impact.
    • More World-Class Airports through PPP 6 more airports have been identified for 2nd round bidding for Operation and Maintenance on Public-Private Partnership (PPP) basis. Additional Investment by private players in 12 airports in 1st and 2nd rounds is expected to bring around Rs. 13,000 crores. Another 6 airports will be put out for the third round of bidding.
    • India to become a global hub for Aircraft Maintenance, Repair and Overhaul (MRO) Tax regime for MRO ecosystem has been rationalized. Aircraft component repairs and airframe maintenance to increase from Rs 800 crore to Rs 2,000 crore in three years. It is expected that major engine manufacturers in the world would set up engine repair facilities in India in the coming year. Convergence between the Defence sector and the civil MROs will be established to create economies of scale. This will lead to the maintenance cost of airlines to come down.
  18. Power Sector Reforms: Many Tariff Policy reforms are planned to ensure Consumer Rights safety, promote industry and sustainability of this sector. Power Departments / Utilities in Union Territories will be privatized.
  19. Space Sector Reforms: Private sector participation in space activities shall be promoted. This will include providing level playing field for private companies in satellites, launches and space-based services. Private sector to use ISRO facilities and other relevant assets to improve their capacities. Future projects for planetary exploration, outer space travel etc shall also be open for the private sector. There will be liberal geospatial data policy for providing remote-sensing data to tech- entrepreneurs.
  20. Atomic Energy-related reforms: Some of the reforms are 1. Research reactor in PPP mode for the production of medical isotopes to ensure affordable treatment for cancer and other diseases 2. Facilities in PPP mode to use irradiation technology for food preservation & 3. Linking of Start-up ecosystem to the nuclear sector by setting up Technology Development-cum-Incubation Centres for fostering synergy between research facilities and tech-entrepreneurs.