Atmanirbhar Bharat

On 13th May 2020, Prime Minister Narendra Modi announced the “Aatmanirbhar Bharat” package, urging the nation to become “self-reliant” during the pandemic. The following day, Finance Minister Nirmala Sitharaman detailed the first tranche, focusing on the revival of the MSME sector.

The Aatmanirbhar Bharat initiative stands on five pillars: Economy, Infrastructure, Technology-driven systems, Demography, and Demand. Its primary focus is on labor, liquidity, land, and law, aiming to elevate local brands to global status.

To support the Atmanirbhar Bhara tMSME sector, the government introduced several key measures. First, a collateral-free loan of ₹3 lakh crore will benefit 45 lakh MSME units, helping them resume operations and save jobs. Second, a subordinate debt provision of ₹20,000 crore will aid 2 lakh stressed or NPA MSMEs.

Additionally, the revised MSME definition encourages growth over profit distribution. The government will also block global tenders for contracts up to ₹200 crore, ensuring more opportunities for local businesses.

To further assist, the government is providing e-market linkages, replacing traditional trade fairs. A ₹2,500 crore liquidity relief in EPF support will extend to all eligible establishments, with the government covering EPF contributions for another three months, benefiting over 72 lakh employees.

Moreover, the reduction in statutory EPF contributions from 12% to 10% for all organizations, excluding government ones, will inject ₹6,750 crore in liquidity into these businesses.

A special liquidity scheme of ₹30,000 crore targets investment-grade debt papers of NBFCs, HFCs, and MFIs, key financiers of MSMEs. The government also launched a ₹45,000 crore partial credit guarantee scheme 2.0 for NBFCs, covering the initial 20% loss.

Furthermore, a ₹90,000 crore one-time liquidity injection will address Discoms’ receivables, backed by state governments. Lastly, the government extended deadlines by six months for Central Government Agencies, including Railways, the Central Public Works Department, and the Ministry of Road Transport and Highways.

These measures are designed to strengthen the MSME sector, making it more resilient and pivotal in driving India’s journey towards self-reliance.

4o