Coronavirus relief package: Free gas cylinders to Ujjwala beneficiaries for next 3 months
Finance Minister Nirmala Sitharaman on Thursday announced that Ujjwala beneficiaries will get free cooking gas for three months. The FM said that the move would benefit 8.3 crore families in the country.
In order to support the poor amid coronavirus outbreak, Sitharaman announced a Rs 1.7 lakh crore Garib Kalyan Yojana. The package includes cash transfers for farmers, MGNREGA workers, widow/pensioners, apart from benefits under Jan Dhan Yojana, Ujjwala scheme and EPFO.
"A package is ready for the poor who need immediate help like migrant workers and urban and rural poor. No one will go hungry. The package is worth Rs 1.7 lakh crore," Sitharaman said.
The relief package also includes Rs 50 lakh medical insurance cover for each frontline Asha workers, sanitation workers, and medical staff involved in managing coronavirus outbreak.
Also, for the next three months, Rs 500 per month will be distributed to 20.5 crore women Jan Dhan Account holders. The government also hiked the daily wage under MNREGA to Rs 202 a day from Rs 182.
For farmers, the FM said that the government would release the first instalment of Rs 2,000 in the first week of April under the existing PM Kisan Yojana. Total 8.69 crore farmers will be benefited from this moved, the FM claimed.
For poor senior citizens, widow and disabled, the FM announced ex-gratia of Rs 1,000.
For women self-help group (SHGs), Sitharaman declared collateral-free loan up to Rs 20 lakh, which will help 63 lakh self help groups.
Lastly, the FM said that government will pay employee provident fund (EPF) contribution for both employer and employee (12 per cent) each for the next three months The package is for companies that have upto 100 employees and are earning less than Rs 15,000 per month.
Covid-19 impact: Barclays cuts India's GDP target to 2.5%, fiscal deficit to 5% of GDP
In the wake of Prime Minister Narendra Modi declaring a nationwide lockdown of 21 days in India, foreign brokerage Barclays has cut country's calendar year (CY) 2020 GDP forecast from earlier 4.5 per cent to 2.5 per cent now. It has also raised its fiscal deficit projections to 5 per cent of GDP from 3.5 per cent earlier.
"In our baseline assumption, we now factor in four full weeks of a complete shutdown, followed by another eight weeks of partial shutdowns across the country until the end of May (of which one week has passed already), as the COVID-19 related precautions will likely remain in the system. We estimate that the cumulative shutdown costs will be around $120 billion, or 4 per cent of GDP," says Barclays.
As a result of this 'anticipated material slowdown in activity', the foreign brokerage expects the RBI to undertake larger, and deeper rate cuts than previously factored in. "We now see the RBI moving close to 65 basis points at its April policy meeting, and believe an additional 100 basis points of cuts is needed to stabilise market sentiment between the June-August policy meetings (165 bps cumulatively to take rates to 3.5 per cent), along with outright bond purchases through OMOs, possible forbearance for bank loans and targeted liquidity windows for banks and NBFCs," it says.
Barclays expects the government to invoke the clause for managing natural calamities to find fiscal space. This may even entail the RBI directly placing funds with the government, but we wait for more clarity on this issue, it says.
The brokerage says there could be a slippage of 100 basis points due to weaker growth on its fiscal deficit projections of 5 per cent of the GDP. "This will push the consolidated fiscal deficit to -8.2 per cent of GDP, with risks clearly biased upwards."
Meanwhile, stock market on Wednesday rallied taking cues from the global markets, which advanced after US senate leaders reached a deal with the White House on $2 trillion economic stimulus to buttress the economy amid coronavirus-led challenges.
The benchmark Sensex spiked 2,116 points to hit a day's high of 28,790.19, while Nifty traded above its crucial 8,300 level. The total number of active coronavirus cases in India stand at 512 so far, as per Ministry of Health & Family Welfare.
Finance Minister's Top 10 Announcements On Relief Steps Over Coronavirus
Finance Minister Nirmala Sitharaman on Tuesday announced a slew of relief measures for taxpayers and businesses as the country entered a second day of lockdown to curb the coronavirus pandemic. Announcing a relaxation in the due dates for filing of certain returns of income tax as well as Goods and Services Tax (GST), the Finance Minister said the government is already working on a fiscal package to shielf the economy against the rapidly-spreading coronavirus (COVID-19) outbreak, and will soon make an announcement. Briefing the media through video conferencing, the Finance Minister said . The announcements come days after Prime Minister Narendra Modi announced a special task-force headed by the Finance Minister to help businesses already facing strain due to the pandemic. The country has already reported 482 cases of the coronavirus, and health experts have warned that a big jump could be imminent.
Here are 10 big announcements for taxpayers and businesses:
1. The Finance Minister announced a ten-fold increase in the threshold for default under the Insolvency and Bankruptcy Code (IBC) to Rs 1 crore. Currently, the threshold of triggering insolvency cases stands at Rs 1 lakh.
2. In a major relief for the public, as only essential services remained open in many parts of the country to curb the spread of coronavirus, the Finance Minister announced free-of-charge withdrawals from ATMs of any bank for next three months.
3. For taxpayers, the government extended the due date for filing tax returns towards income earned in financial year 2018-19 (assessment year 2019-20) to June 30.
4. The Finance Minister also announced a relaxation in the interest rate applicable on delayed income tax returns (ITRs) to 9 per cent from the existing 12 per cent.
5. Extending tax dispute resolution scheme "Vivad Se Vishwas" by three months, also to June 30, Ms Sitharaman said those availing the scheme will not be required to the 10 per cent interest on principal as mandated under existing rules.
6. She also announced an extension in the due date for mandatory linking of Aadhaar with PAN to June 30. Currently, the compulsory seeding of the Aadhaar number into the PAN has to be carried out by March 31.
7. The government also announced a range of relief measures for companies, including an extension in the deadline for filing returns towards the months of March, April and May to June 30.
8. Also, companies with a turnover of less than Rs 5 crore will not have to pay interest, penalty or late fee for filing delayed returns, the Finance Minister said.
9. Announcing a relaxation for companies to hold board meetings for next two quarters, Ms Sitharaman said: "If no board meeting is held for 2019-20, it will not be considered a violation."
10. Today's moves are under the special task-force constituted by government recently to tackle the coronavirus outbreak, the Finance Minister said.
Finance Minister extends deadline for GST returns to June 30 from March 31
Finance Minister Nirmala Sitharaman announced on Tuesday that the last date for filing GST returns for March, April and May has been extended to June 30. The previous date for filing of GST returns was March 31, 2020. The deadline for composition returns on GST has been also been extended to June 30, 2020.
The FM made these announcements during her address to the media on measures to tackle the economic impact of coronavirus. She added that no different staggering dates will be followed while filing GST returns for March, April and May.
Sitharaman also announced that companies with less than Rs 5 crore turnover won't be charged interest or penalty for the late filing of GST. Bigger companies will have have to pay the interest amount at 9 per cent for delayed filing of GST, but no late fee or penalty will be levied.
The last date for opting for the compensation scheme has been extended to June 30, 2020.
The FM has also announced that the deadline for filing income tax returns for Financial Year 2018-2019 has been extended to June 31, 2020.
The deadline for Aadhar-PAN linking has been extended to June 30. The interest charged on delayed deposits of TDS has been lowered from 12 per cent to 9 per cent and will be charged till June 2020.
In her address, the FM also said that customs clearance has been made an essential service and hence will continue to operate 24/7 till June 30, 2020. Vivad se Vishwas tax dispute resolution scheme has been extended by three months to June. Those willing to utilise the scheme will not have to pay a 10 per cent additional charge.
According to the FMs announcements, debit card holders can now withdraw cash from any ATM without being charged a fee, even if the ATM is not of the bank the cardholder has their account in. The minimum balance charges have also been removed on all bank accounts for three months.
Coronavirus: Banks cut operations to fight Covid-19; check new timings of SBI, HDFC Bank, ICICI Bank
Several banks have revised their operating times and suspended non-essential banking services because of the rising novel coronavirus (COVID-19) cases in India. Banking services like passbook updates, counter cheque collections have been restricted as the banks promote social distancing.
Many banks have also requested users to avoid visits to branches and go digital with mobile banking, internet banking, UPI/QR payments.
Private players - IndusInd Bank, HDFC Bank and ICICI Bank - will now remain open for four hours and will continue to provide essential services like cash deposits, cash withdrawals, government transactions and clearing of cheques. Banks have instructed their employees to stay at home in case they exhibit COVID-19 symptoms.
HDFC Bank has suspended services like passbook updates and foreign currency purchases. While the counter cheques collection service is halted, bank customers can still deposit cheques in the cheque-drop boxes. HDFC Bank has changed its operation timings from 10.00 am to 2.00 pm until March 31.
India's largest bank SBI has not changed its working hours but, has barred services like account opening, cash withdrawals, passbook printing, currency exchange services.
Canara Bank has also made no revisions in the work timings but, has reduced non-essential services -- passbook printing, currency exchange. The bank has also reportedly asked its staff to not have over 15 per cent of its total working strength in the office.
ICICI Bank has reduced its operating time from 10 am to 2 pm till March 31 but hasn't suspended any banking services so far.
Punjab National Bank has also not changed its working hours or services.