The pandemic, which has afflicted most countries across continents, has negatively influenced the world economy. This pandemic has cast its shadow across several business divisions with vast differences in global manufacturing, supply networks, and cross-border and inter-country trade. The spread of the virus in India and the government’s mitigation plan of a 53-day nationwide lockdown from March 25 to May 17, 2020, with the possibility of further extensions by many state governments, is expected to impact numerous sectors of the economy substantially.
The Government of India has been planning strategies and action plans to meet these difficult times and ensure that businesses and the economy recover. They focus not just on business continuity and sectoral revitalization but also on enhancing the country’s ease of doing business by issuing notices. This article discusses some of the particular efforts taken by the Indian government and several ministries to help businesses grow in India.
SBI pandemic funding scheme
The State Bank of India, one of India’s top lenders, has launched a funding program to help small and medium businesses continue their operations. SBI will make additional credits accessible to its existing customers on an as-needed basis through the pandemic emergency Credit Line (CECL). CECL is in effect till June 30th. CECL will grant loans of up to 10%, or up to Rs. 200 Crores, under the existing fund-based working capital (FBWC) scheme. When applicable, a fixed interest rate of 7.25 percent will be levied.
The following are some of the most crucial details of the SBI pandemic loan scheme:
- CECL will be in the form of a 12-month demand loan to help satisfy short-term cash flow requirements.
- All regular accounts that are not overdue for more than 30 days as of March 16 are eligible for the lending plan for businesses.
- Borrowers who have taken out specialized small business loan packages are also eligible for the facility.
Tax filing deadline extension
The deadline for filing business income tax returns for the 2020-21 fiscal year has been extended from March 31, 2021, to July 31, 2021. In addition, the deadline for filing TDS returns for the quarter ending March 30, 2021, has been extended to July 31, 2021. Employers can now create Form-16 for their employees for 2020-21 by August 15, 2021.
SIDBI for startups
SIDBI, India’s Small Industries Development Bank, has recognized the operational and financial issues entrepreneurs face across the country. It has been working to assist affected firms by implementing the COVID-19 Startups Assistance Scheme (CSAS) program. This program will help creative firms that have proved their ability to adjust to the economic effects of pandemics while also ensuring their employees’ safety and financial security.
The CSAS program helps startups that will immediately benefit from the program. This program aims to give companies with immediate working money in the next 45 to 90 days. Startups can get a startup loan of up to Rs. 2 Crores through this initiative.
MSMEs’ insolvency threshold is being raised.
To provide some assistance to the MSME sector, the Finance Minister has approved an increase in the default threshold, preventing insolvency proceedings from being initiated. She also stated that they will continue to monitor the situation and may suspend Sections 7, 9, and 10 of the Insolvency and Bankruptcy Code in the coming days.
Atal Bimit Vyakti Kalyan Yojana scheme
Many businesses are temporarily closing or laying off employees because they are unable to pay their wages. You might recommend this idea to your employees if your company is having trouble paying their staff.
Even though the Atal Bimit Vyakti Kalyan Yojana is not specifically created for pandemics, anyone can profit from it. Individuals who have been fired from their workplace will be compensated in the form of cash put in their bank accounts for three months from the date of unemployment under this program. Individuals who have enrolled in the Employees State Insurance (ESI) system are eligible to participate.
MSME Ideas Portal
Mr. Nitin Gadkari founded MSME Ideas Portal intending to connect venture capitalists with SMEs. The portal is primarily designed to serve and help MSMEs in rural and semi-urban areas. During these pandemics, this web will also serve as a comprehensive resource for exploring the schemes offered by the federal and state governments to expand MSMEs. A copyrighted business idea is required for MSMEs to participate in this program.
These are some of the actions taken by the Indian government to guarantee that businesses continue to operate so that we, as a nation, can continue to progress toward our common goal of growth across all sectors.
While checking them out, make sure you’re avoiding physical touch and using digital payments to maintain social distance. Visit Finserv MARKETS to learn more about various business loans.