In this thread we breakdown the recent #fiscal stimulus announcement. India stands next to the USA concerning the size of the package. It totals to nearly 10% of #GDP. Overall government liquidity support is 5,850 bn with a fiscal burden of 165 bn.

Out of the 4 pillars discussed by the PM, the FM has concentrated on the first pillar of liquidity. The focus is to revive the MSME sector and supply chains. #MSME has been redefined on the basis of both #investments and turnover.

MSME are facing dire #liquidity issues. Credit systems are in risk-off mode. Labour markets are dislocated. Government support is a lifeline to this sector which accounts for 30% of our workforce.

The #RBI's liquidity facilities targeting MSME were partially successful. A 100% credit guarantee by GOI helps achieve the intended target. Liquidity support enables restarting business activity without any obstacles. Liquidity - 3,000 bn, fiscal cost - 0

#COVID19 added stress in MSME Loans. A subordinated debt facility by banks for promoters facilitates liquidity infusions. For this scheme, 40 bn will be infused into credit guarantee fund #CGTMSE.

This partially guarantees the debt provided by the #banks. Liquidity - 200 bn, fiscal cost - 40 bn

#MSMEs also need to increase size and capacity. A fund of fund will be set up to infuse #equity into viable MSME.
Liquidity - 500 bn , fiscal cost - 100bn

With the possible post-COVID effects on the marketing process for the MSMEs, an e-market linkage can augment the #marketing system.

The first step towards a self-reliant India is to disallow global tenders up to 200 Crores for government procurements. The cascading effect may benefit MSMEs that provide ancillary products.

Temporary liquidity support for the formal sector by reducing the stress of fixed costs in the business.
Liquidity - 92.5 bn, fiscal cost - 25 bn

300 bn fully guaranteed and 450 bn partially guaranteed liquidity injection program for #NBFCs. Many NBFC papers are maturing shortly. Smaller players are more vulnerable. This measure comes as a relief to the industry and benefits MSME too.
Liquidity - 750 bn , fiscal cost - 0

The economic #lockdown decreased demand in the Power Sector. Discoms, Transmission, & Generation Companies are affected. Credit facilities through PFC & REC relocate the financial burden.
Liquidity - 900 bn , fiscal cost - 0

#Economy

#SocialDistancing norms have scattered migrant labor. This step provides enough time for infra companies to complete projects. Relaxed #RERA compliance relieves real estate developers.

Reduced #TDS and TCS rates inject more liquidity into the system. Tax compliance (return filing and audits) & Vivad Se Vishwas dates have been extended. This provides much-needed relief to #tax-payers.
Liquidity - 500bn , fiscal cost - 0

The fiscal stimulus will help the #economy get back on track.