The global economy has been adversely affected by the COVID-19 pandemic, which has impacted most countries across continents. This pandemic has cast its shadows across different business lines with huge disparities in global production, supply chains and cross border as well as inter-country trade.
The spread of COVID-19 in India and its mitigation plan of a 53-days nationwide lockdown from 25 March 2020 to 17 May 2020 and a possibility of further extension of lockdown by several state governments, there is likely to be a significant impact across various sectors of the economy.
To address these adverse times and to make sure that businesses and the economy spring back to their feet, the Government of India has been preparing strategies and action plans. They are not only focusing on business continuity and sectoral revival but also on improving ease of doing business in the country by releasing notifications/amendments/circulars.
This article talks about some of the special measures initiated by the Central Government, Reserve Bank of India, Securities & Exchange Board of India (SEBI), Insurance Regulatory and Development Authority (IRDAI) and the sectoral ministries to boost businesses in India.
SBI COVID-19 funding scheme
One of the largest Indian lenders, The State Bank of India has introduced a funding scheme to assist small and medium businesses to continue their operations. As per an article by Business Standard, SBI will make additional credits available via Covid-19 Emergency Credit Line (CECL) to its existing borrowers on an ad-hoc basis.
CECL will be in force till 30th June. Loans of up to 10 per cent or a maximum of up to INR 200 crores under existing fund-based working capital (FBWC) will be provided under CECL. A fixed interest rate of 7.25 per cent will be charged as and when applied.
Listed below are some of the important things to know about the SBI COVID-19 loan scheme:
- CECL will be in the form of a demand loan with a term of 12 months to help meet temporary cash flow requirements
- The loan scheme for businesses is available to all standard accounts who do not have overdue for over 30 days, as on March 16
- Borrowers who have availed specialised loan products for small businesses are also eligible for the facility
Tax filing deadline extension
The last date to file income tax returns for businesses for the AY 2019-20 has been extended from 31st March 2020 to 31st July 2020.
Also, the time limit to file TDS returns for the quarter ending on 30th March 2020 has been extended to 31st July 2020. The employers can now generate Form-16 for FY 2019-20 of their employees by 15th August 2020.
Here’s a detailed article on COVID-19 Impact: GST Return Filing Extended
SIDBI for startups
Small Industries Development Bank of India (SIDBI) has recognized the operational and financial challenges faced by startups across the nation. It has been making efforts to provide aid to the affected startups by launching a scheme called COVID-19 Startups Assistance Scheme (CSAS).
This scheme will provide assistance to innovative startups that have demonstrated the ability to adapt to economic impact from Covid-19 and ensure its employees’ safety and financial stability.
CSAS provides assistance to startups that will directly benefit from the scheme. The objective of this scheme is to provide quick working capital in the next 45 to 90 days to startups. Therefore, for faster processing, a Recommendation Committee comprising 5 members (3 from SIDBI and its nominees and 2 from the Venture Capital industry) will be created. Through this scheme, startups can receive a loan of up to INR 2 crore.
Read more about this scheme here SIDBI’s new COVID-19 Startup Assistance Scheme
Increase in insolvency threshold for MSMEs
To bring in some relief to the MSME sector, the Finance Minister has announced a rise in the threshold of default to Rs 1 crore from the existing Rs 1 lakh to prevent triggering of insolvency proceedings. She also said that they will be watchful of the present situation and will consider suspending Section 7, 9 and 10 of the Insolvency and Bankruptcy Code in the coming days.
Check this out Razorpay COVID-19 Relief Fund
Atal Bimit Vyakti Kalyan Yojana scheme
A lot of businesses are temporarily shutting down or laying off their employees since they are not able to pay wages to them. If you are a business that is struggling to pay wages to your employees, this scheme is something you can recommend to them.
Though The Atal Bimit Vyakti Kalyan Yojana is not particularly designed for Covid-19, an individual can avail the benefit of it. Essentially, under this scheme, individuals who have lost their employment will be granted compensation in the form of cash deposited in their bank accounts for three months from the time of unemployment. Only individuals who have subscribed to Employees State Insurance (ESI) scheme can be a part of this.
Please note: All employees of a covered unit, whose monthly incomes (excluding overtime, bonus, leave encashment) does not exceed INR 21,000 per month, are eligible to avail benefits under this Scheme. This scheme can be availed only once in a lifetime.
MSME Ideas Portal
Launched by Mr. Nitin Gadkari, the idea behind MSME Ideas Portal is to facilitate venture capital inventors to connect with businesses. This portal will also act as a central repository to explore the schemes offered by the central and the state government to the growing MSMEs during these times of a pandemic. Primarily, the portal aims to cater and assist MSMEs based in rural and semi-urban areas. The pre-requisite for MSMEs to be a part of this is to have a patented business idea.
Government e-Marketplace (GeM)
The launch of GeM was announced in the budget speech 2019. You can sell your goods to the government easily via this platform. All you need to do is register your products on the platform. After a simple step of authorization, the government buys your goods from you and pays you online.
During the time of worldwide crisis, the government is on the lookout for medical and inventory supplies for their health workers aka COVID warriors. GeM is one of the best places to help those in need and at the same time, keep your business running.
These are some of the steps taken by the Government of India to ensure that businesses keep moving so that we, as a nation can keep walking towards our collective goal of growth, in all the verticals.
While you check these out for yourself, make sure you are avoiding physical contact and following social distancing by accepting digital payments. Head over to our website to explore our range of products!