Congress' Prithviraj Chavan tells govt to borrow '$1 Trillion' gold from religious trusts

Senior Congress leader Prithviraj Chavan on Wednesday recommended that the Centre government 'appropriate' gold stock of all religious trusts in the country, which would help to generate at least one Trillion dollars that can be used to tackle the COVID-19 crisis. Chavan further suggested that the gold can be borrowed through gold bonds at a low-interest rate, in order to fight against the pandemic.

Taking to Twitter, Chavan wrote, "Govt. must immediately appropriate all the gold lying with all the Religious Trusts in the country, worth at least $1 trillion, according to the #WorldGoldCouncil. The gold can be borrowed through gold bonds at a low-interest rate. This is an emergency".

Chavan's suggestion came a day after Prime Minister Narendra Modi announced a combined stimulus package worth Rs 20 lakh crore (about $266 Billion) and stressed self-reliance to revive the economy which is under strain due to the COVID-19 crisis.

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PM announces financial package

In his address to the nation on Tuesday, PM Narendra Modi stated that the new financial package was worth Rs. 20 Lakh crore which is 10% of India's GDP. PM Modi mentioned that this would benefit the workers, hawkers, street vendors, farmers, the business class, etc. The Prime Minister added that special emphasis has been paid to land, labour, liquidity, and laws. However, the details of the package were announced by Union Finance Minister Nirmala Sitharaman on Wednesday, May 13.

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FM unveils first set of measures in the financial package

Here are the 15 measures:

1. Rs. 3 lakh crore collateral-free automatic loans for business, including MSME-Emergency credit line extended to businesses including MSMEs from banks and NBFCs up to 20% of outstanding credit as on February 29,2020. This is set to benefit 45 lakh units.
2. Rs. 20,000 crore subordinate debt for MSMEs- Centre will facilitate the provision of Rs.20,000 crore as subordinate debt for stressed MSMEs. 2 lakh MSMEs are likely to benefit. 
3. Rs. 50,000 crore equity infusion through MSME Fund of Funds- As MSMEs face a severe shortage of equity, the Fund of Funds with a corpus of Rs.10,000 crore shall be set up. This shall provide equity funding for MSMEs with growth potential and encourage them to get listed on the main board of Stock Exchanges. 
4. The new definition of MSMEs- The definition of MSMEs has been revised whereby investment limit shall be revised upwards. Also, an additional criteria for turnover is being introduced. Necessary amendments to the laws will be brought about.
5. Global tenders to be disallowed up to Rs. 200 crore- Global tenders shall be prohibited in government procurement tenders up to Rs.200 crore as Indian companies have faced unfair competition from foreign companies. This is a crucial step towards a self-reliant India. 
6.  Other interventions for MSMEs- The Union government and Central Public Sector Enterprises will honour every MSME receivable in the next 45 days. E-market linkage shall be promoted as a replacement of trade fairs. 
7. Rs. 2500 crore EPF support for business and workers for 3 more months- The payment of 12% of employer and 12% of employee contributions made into the EPF accounts of eligible establishments shall continue for the months of June, July and August. Overall, liquidity relief of Rs.2500 crore will be provided to 72.22 lakh employees. 
8.  EPF contribution reduced for business and workers for 3 months- Statutory contribution of both employer and employee shall be reduced to 10% each from the existing 12% each for all establishments covered under EPFO. This move shall provide liquidity of Rs.6750 crore to employees and employers over a period of 3 months. 
9. Rs.30,000 crore liquidity facility for NBFCs/HFCs/MFIs- The Centre will launch a Rs.30,000 crore special liquidity scheme to provide liquidity support for NBFC/HFCs/MFIs and mutual funds, creating confidence in the market. 
10. Rs.45,000 crore Partial Credit Guarantee Scheme 2.0 for NBFCs- The existing PCGS scheme will be extended to cover borrowings such as primary issuance of bonds/CPs of NBFCs, HFCs and MFIs. It shall result in liquidity of Rs.45,000 crore. 
11. Rs.90,000 crore liquidity injection for DISCOMs- As the revenue of power distribution companies have plummeted, liquidity of Rs.90,000 crore shall be infused in DISCOMs against receivables.
12. Extension of registration and completion date of real estate projects under RERA- The registration and completion date of all registered projects expiring on or after March 25, 2020, shall be extended suo-moto by 6 months. It can be extended by a further period of up to 3 months if required. 
13. Rs.50,000 crore liquidity through TDS/TCS reductions- The Tax Deduction at Source for non-salaried specified payments made to residents and rates of Tax Collection at Source for the specified receipts shall be reduced by 25% of the existing rates. This measure shall be applicable from May 14 until March 31, 2021, releasing liquidity of Rs.50,000 crore. 
14. Other direct tax measures- The due date of all Income Tax return for Fiscal Year 2019-20 shall be extended from July 31, 2020 and October 31, 2020 to November 30, 2020. Furthermore, the period of Vivad Se Vishwas scheme for making payment without additional payment will be extended to December 31, 2020. 
15. Relief for contractors- All Central agencies such as Railways, Ministry of Road Transport and Highways shall extend construction work, service contracts etc. by 6 months. 

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