What You Should Know About India’s Rs. 20 Lakh Crore Package.

With the economy facing a shock due to COVID -19, it was necessary for the government to do something to keep the economy afloat while the fight against the virus continues. Prime Minister Narendra Modi announced this package on Tuesday. Better said, the package works out to be roughly 10% of the GDP, making it one among the largest in the world.

Listing down the Must Knows & the Benefits of India's Mega Package :

  1. Benefits to Salaried People

  • A liquidity relief of Rs 2,500 crore EPF support is being given to all EPF establishments & EPF contribution will be paid by Government for another 3 months till August (government to pay employee, employer contribution to EPF accounts)

  • The in-hand pre-tax cash are likely to increase

  1. Benefits to MSMEs

  • The package allocates Rs 3 trillion for collateral free loans (meaning no assets to be pledged to borrow money), these loans have a 4 year tenure with no due for one year.

  • It also allocates Rs 20,000 crore to help currently stressed MSMEs + Rs 50,000 crore for equity funds.

  • Definition of MSME changed : Company with investment of Rs 1 crore, turnover of Rs 5 crore is a micro enterprise; one with Rs 10 crore investment, turnover of Rs 50 crore a small enterprise; one with Rs 20 crore investment, Rs 100 crore turnover a medium enterprise

  • Nurturing & promotion of local brands by bringing them to Global level.

  1. Benefits to Businesses

  • Another allocation is for non banking financial companies wherein Rs 30,000 crore is allocated to buy debt issued by NBCs, HFCs and MFIs.

  • Rs 90,000 crore liquidity for power distribution companies

  • Rs 111 lakh crore Nation Infrastructure Pipeline (NIP) is also part of this strategy. This will also include digital infrastructure to promote online healthcare and education.

  1. Other Benefits

  • The package includes Rs 1.7 lakh crore of free food grains to poor and cash to poor women and elderly as announced in March. It also includes a cut in interest rates.

  • Direct Benefit Transfer (DBT) scheme to deliver money directly to Jan Dhan accounts of the poor

  • Taxes are to be cut by 25% for the remainder of the current fiscal year and the due date for tax collection has been extended to November 30, 2020.


In short, the Government’s plan is based on 5 Important Pillars: Economy, Infrastructure, Tech-driven Systems, Demography & Demand. This package aims to make India self reliant and almost 3,67,000 organisations are to be benefited.