Nirmala Sitharaman Press Conference Highlights| Steps announced will boost liquidity, empower entrepreneurs, says PM Modi
This Rs 20 lakh crore package includes the previous Rs 1.7 lakh crore stimulus announced by the Finance Minister and steps taken by the RBI
Finance Minister Nirmala Sitharaman addressing press conference on May 13, outlined the first tranche of the contours of India’s massive Rs 20 lakh crore fiscal stimulus announced by Prime Minister Narendra Modi.
FM Sitharaman said the announcements will be made in tranches. Today's tranche will include measures as follows: 6 are for MSMEs, 2 are for EPF, 2 for NBFCs and MFIs, 1 for discoms,
1 for contractors, 1 for real estate sector, and 3 tax measures.
The financial stimulus announced by PM Modi is almost 10 percent of India’s gross domestic product (GDP) and comes as the country battles the economic effects of the coronavirus pandemic.
This Rs 20 lakh crore figure, however, includes the previous Rs 1.7 lakh crore stimulus package announced by Finance Minister Nirmala Sitharaman and steps taken by the Reserve Bank of India (RBI) since lockdown began on March 24 midnight. These earlier measures now together account to Rs 7.79 lakh crore of the complete package.
BK Goenka, Chairman, Welspun Group: I appreciate the reform-driven approach for Aatma Nirbhar Bharat. Today's tranche of announcement by Finance Minister on collateral-free loans, liquidity boosting measures & several beneficial schemes for MSMEs, NBFCs & DISCOMs are steps in right direction amid COVID crisis.
May 13, 2020 / 08:50 PM IST
Amar Ambani, Senior President and Head of Research – Institutional Equities, YES Securities: The package announced by the finance minister is effectively designed to be impactful, yet not burden government finances.The policy has been crafted largely around liquidity needs of employees, MSME and NBFCs.Market will eagerly await for announcements around land reforms, labour and law in the coming days. Collateral free loans for MSMEs with a full credit guarantee by the government will be highly fruitful.
May 13, 2020 / 08:32 PM IST
Pradeep Mittal, Executive Vice Chairman, Essar Power: A key aspect of Modi government's mega stimulus package is to use the resources to drive fundamental, grassroots level change. Earlier, too, attempts have been made to restructure discoms. In this instance, the government has made equity infusion contingent on improvement in operational performance. This will force states and discoms to improve infrastructure and collection efficiency. This is not a giveaway package; this is a lever of structural change.
May 13, 2020 / 08:28 PM IST
Shishir Baijal, Chairman & Managing Director, Knight Frank India: Today’s announcement by the Finance Minister was eagerly awaited by the real estate sector hoping to receive a new lease of life mostly from challenges emanating from liquidity and demand challenge. To enhance liquidity support and to assuage risk concerns a further expansion of partial credit guarantee scheme for the NBFC/ HFCs has been provisioned. This will hopefully enthuse lenders to look at the sector favorably. On the lockdown related impact on labour shortage and construction delays, extension of registration and completion date of real estate projects under RERA by 6 months will provide some relief to the sector. We now await to hear the subsequent announcements, that could resurrect demand and also boost Infrastructure sector, to make a complete assessment of the impact on the real estate sector.
May 13, 2020 / 08:20 PM IST
Rajnish Kumar, Chairman, State Bank of India: The policy bouquet unveiled by the Government is well-structured, suitably targeted, within reasonable fiscal limits but still having the maximum impact. The measures for MSME through guarantees, equity infusion and debt support will incentivize bank lending to MSMEs as well as providing crucial support to stressed entities in the current situation. The proposed definitional change for MSME sector based on turnover is progressive and is perfectly synchronized with the GSTN framework. It is time that we now implement this legislation. The envisaged support of full credit guarantees to the lower rated NBFC and HFC entities will restore stability in financial markets and could act as a clear enabling factor for compressing credit spreads. The steps for real estate sector, postponement of tax returns and reduction of TDS are also important policy milestones that have been announced today
May 13, 2020 / 08:19 PM IST
Kerala Finance Minister Thomas Isaac: If the first day's package of Union FM is a fair sample the Rs 20 lakh stimulus is going to be deeply disappointing. The actual outflow resources directly from the budget is only around Rs 30,000. At least the interest payment of MSME sector during the moratorium could be waved.
May 13, 2020 / 08:16 PM IST
Kiran Mazumdar Shaw, Executive Chairperson of Biocon Ltd: With such a generous stimulus package we can’t afford ‘business as usual’. Let’s leverage this to deliver nonlinear growth. Half the regulations must go. Laws must be changed and digital platforms must be used for transparency n governance. Trust deficit with Pvt sector must go.
May 13, 2020 / 08:12 PM IST
Suman Chowdhury, Chief Analytical Officer, Acuité Ratings & Research: Given the liquidity challenges in NBFCs and MFIs, the special liquidity scheme for Rs. 30,000 Cr which will invest in investment grade papers of NBFCs/HFC/MFIs backed by a government guarantee is a big positive.
May 13, 2020 / 08:12 PM IST
Suman Chowdhury, Chief Analytical Officer, Acuité Ratings & Research: The collateral free loans to small businesses up to an aggregate amount of Rs. 3 lakh Cr will be completely guaranteed by the government and importantly, have a longer tenor of 4 years with a moratorium in the first year. Such an emergency credit line will go a long way to fund the working capital required to restart the MSME’s operations, protect against any job losses and also address the challenge of credit aversion being seen in lenders.
May 13, 2020 / 08:10 PM IST
Union Minister Nitin Gadkari: Historic steps by government towards Atmanirbhar Bharat by strengthening the MSMEs which are the backbone of the country’s economy.