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Savvy Midha

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Published on: Sep 16, 2026

Atmanirbhar Bharat - Coronavirus Economic Stimulus Package

On May 13, 2020, Smt. Nirmala Sitharaman, the Hon'ble Finance Minister, unveiled the INR 20 lakh crore Financial Aid package under the Atmanirbhar Bharat initiative. This announcement followed the Prime Minister's address to the nation, focusing on aiding Micro, Small, and Medium Enterprises (MSMEs) in India. The package aims to spur economic growth and foster a self-reliant India, with 16 relief measures identified: 6 for MSMEs, 2 related to EPF, 2 for NBFCs/HFCs/MIFs, and others for DISCOMs, contractors, the real estate sector, and direct taxpayers.

Micro Small and Medium Enterprises (MSMEs)

Collateral Free Loans

INR 3 lakh crore worth of collateral-free loans have been announced to benefit around 45 lakh units. Eligible borrowers with less than INR 25 crore outstanding and INR 100 crore turnover can avail of these loans until October 31, 2020. The loans have a 4-year tenure, with a 12-month moratorium on principal repayment, and a 100% credit guarantee cover to banks and NBFCs.

Subordinate Debt for Stressed MSMEs

The package provides INR 20,000 crore as subordinate debt to stressed or NPA MSMEs, enabling promoters to infuse equity. An additional INR 4,000 crore support is extended to CGTMSE for partial Credit Guarantee Support, benefiting an estimated 2 lakh units.

Equity Infusion via Fund of Funds

A fund with a corpus of INR 10,000 crore will support viable MSMEs facing equity shortages. This fund of funds (FoF) structure, comprising a Mother Fund and Daughter Funds, aims to leverage around INR 50,000 crore at the daughter fund level, boosting MSME expansions and potential stock exchange listings.

MSMEs Redefined

The criteria for MSME classification have been revised, raising investment and turnover limits and eliminating differences between the service and manufacturing sectors. For more insights on execution proceedings under industrial law, refer to this article.

New MSME Classification

ClassificationMicroSmallMedium
Manufacturing and Services UnitsInvestment < 1 cr
And
Turnover < 5 cr		Investment < 10 cr
And
Turnover < 50 cr		Investment < 20 cr
And
Turnover < 100 cr

Global Tenders

Global Tenders disallowed up to INR 200 crores: To support Indian MSMEs, global tenders up to INR 200 crores have been disallowed, reducing foreign competition.

Miscellaneous Measures

The package introduces initiatives to ease liquidity issues faced by MSMEs:

  • Government and CPSE payments to MSMEs within 45 days.
  • MSMEs linked via e-markets instead of trade fairs.
  • Fintech-enabled transaction-based lending on e-marketplaces.

Employees Provident Fund (EPF)

Extension in EPF Support for Business and Workers

Under the Pradhan Mantri Garib Kalyan Package (PMGKP), the 12% EPF contribution by both employers and employees is government-borne and has been extended for three more months up to August 2020. This applies to organizations with up to 100 employees where 90% have salaries below INR 15,000.

Reduction in EPF Contribution

The statutory PF contribution for both employers and employees is reduced to 10% from 12% for three months, impacting around 6.5 lakh organizations. However, CPSEs and State PSUs continue contributing 12% as employers. To explore business and tax compliance further, visit Proprietorship Compliance in Himachal Pradesh.

NBFCs/HFCs/MFIs

Special Liquidity Scheme

A special liquidity scheme of INR 30,000 crore will invest in both primary and secondary markets, fully guaranteed by the government.

Partial Credit Guarantee Scheme

NBFCs/HFCs/MFIs with low credit ratings can access funds for individual and MSME lending. The scheme extends to new borrowings, with the government covering the first 20% of the loss. This will provide liquidity of INR 45,000 crore. More details on financial instruments like Bonds can be found here.

DISCOMs

Liquidity Injection

A liquidity injection of INR 90,000 crore supports DISCOMs against receivables, with state-guaranteed loans aiding liability discharge to Gencos. Central Generating Companies will offer rebates, passing benefits to consumers.

Contractors

Relief to Contractors

Central agencies, like Railways and CPWD, offer costless extensions up to 6 months for contractors. To improve cash flow, partial bank guarantees are released upon project completion.

Real Estate

Extension of Registration and Completion Date

COVID-19 is considered "Force Majeure," extending registration and completion dates of projects by 6 months, with an additional 3-month extension if needed. Other RERA compliance timelines are also extended. Learn more about building materials classifications relevant to the real estate sector.

Tax Measures

TDS/TCS Rate Reduction

The TDS/TCS rates are reduced by 25% till March 31, 2021, releasing about INR 50,000 crore liquidity. For further discussions on tax filing, explore Income Tax Filing in Gandhinagar.

Other Measures

  • Immediate issuance of pending funds to charitable trusts and non-corporate businesses.
  • Income Tax return deadlines extended to November 30, 2020, and due date for tax audits to October 31, 2020.
  • Assessment timelines extended, with final date extensions to December 31, 2020, and September 30, 2021, respectively.
  • Extension of "Vivad se Vishwas" scheme payment without additional charges till December 31.
Back to Learn

Frequently Asked Questions

Common questions about Atmanirbhar Bharat Economic Stimulus Package.

The Atmanirbhar Bharat package is a ₹20 lakh crore financial aid package announced by the Hon'ble Finance Minister, Smt. Nirmala Sitharaman, on 13th May 2020. It aims to spur economic growth and make India self-reliant by providing various relief measures, particularly for MSMEs.
The key relief measures for MSMEs include collateral-free loans of ₹3 lakh crore, subordinate debt of ₹20,000 crore for stressed MSMEs, equity infusion of ₹10,000 crore through a Fund of Funds, redefinition of MSME classification, and disallowing of global tenders up to ₹200 crore.
To avail the collateral-free loans, the borrower should have an outstanding loan of less than ₹25 crore and a turnover of less than ₹100 crore. The loan tenure is 4 years with a 12-month moratorium on principal repayment, and banks/NBFCs will receive 100% credit guarantee cover from the government.
The definition of MSMEs has been revised to bring more units under its purview. Both investment and turnover limits have been increased, and the distinction between manufacturing and service sectors has been eliminated. The new classification is based on investment and turnover limits for micro, small, and medium enterprises.
The government will continue to bear the 12% EPF contribution for organizations with up to 100 employees (with 90% earning below ₹15,000) for 3 more months until August 2020. Additionally, the statutory EPF contribution has been reduced to 10% from 12% for all organizations covered by EPFO for the next 3 months.
A special liquidity scheme of ₹30,000 crore has been announced to infuse equity in NBFCs/HFCs/MFIs through investments in primary and secondary market transactions. The securities under this scheme will be fully guaranteed by the government.
The package includes a liquidity injection of ₹90,000 crore for DISCOMs against receivables and loans against state guarantees to discharge liabilities to power generation companies (Gencos). Central Gencos will also provide rebates to DISCOMs, which will be passed on to consumers.
Central agencies like Railways and CPWD will provide an extension of up to 6 months without costs to contractors. They will also partially release bank guarantees to contractors for partially completed contracts to ease their cash flows.
COVID-19 will be treated as a "Force Majeure" event, and the registration and completion dates for all registered projects under RERA will be automatically extended by 6 months, with an additional extension of 3 months if needed.
The key tax relief measures include a 25% reduction in TDS/TCS rates for the remaining period of FY 2020-21, extension of various income tax return filing deadlines, extension of the Vivad se Vishwas Scheme deadline, and immediate issuance of pending refunds to charitable trusts and non-corporate businesses.