Compliances are critical part of the Indian Businesses. In India Compliances are complex, vast and never ending. From monthly to quarterly to annual, there are countless number of compliances a business entity has to take care in India.

As the Covid-19 has hit the entire business world, government has given relaxations in various due dates.

For the benefit of business world, we have summarized key due dates and their revised due dates.

VARIOUS COMPLIANCES DUE DATES & OTHER IMPLICATIONS AFTER COVID-19 PANDEMIC

In case you wish to automate your compliances, you can subscribe to Compliance Management Software. As a support to MSMEs in this difficult time, TYASuite is offering 3 months free subscription to their entire range of cloud software’s including Procurement Software, Inventory Management Software, Cloud ERP, Asset Management Software, Cloud Accounting Software and Project Management Tool.

Avail the Free Subscription today.

The COVID-19 crisis has left the global economy in shambles, and India has fared no better. With almost 3 months of a nationwide lockdown, business have been closed for a long time. The lockdown rules have recently been relaxed, and businesses are beginning to start operations gradually.

As businesses and the Indian economy reopens, all companies must take a strong and detailed look at their finances and prepare for the unprecedented and unpredicted times ahead. Here are a few things every CFO needs to consider to ensure that his company has a plan to survive the recession -

1. Evaluate Where You Stand

The first step is obvious - conduct a detailed and accurate study and account for your company's current financial status. This includes, but is not limited to -

Your Cash-flow

Take a good account of inbound and outbound cash flows to evaluate your company's overall liquid capital. Knowing how much cash you have to use, how much cash is coming in, and how much cash is going out is essential to plan for the future.

Your Inventory

Take stock of your existing inventory in detail. Make sure every item is accounted for, quality-checked, and ready for use as required once your business reopens. Inaccurate inventory data can cause major problems in your production if demand suddenly increases in the coming times. Efficient Inventory Management becomes very critical at this point.

Your Assets

Make sure you have an up-to-date idea of all of your assets including whether it is ready to use, possible maintenance or repair requirements, warranty status, current relevance and insurance status. Effective Asset Management including warranty management and insurance management becomes very critical at this point. Ensure the assets are properly insured and extended warranty is taken if required.

2. Forecast All Possibilities

As a CFO, one of your main roles is forecasting ? difficult in normal times ? it?s even tougher to forecast what the post COVID-19 landscape will look like. Therefore, it is prudent to consider all the conditions around us now, and forecast a wide range of possibilities. That way, whatever the outcome of the pandemic, your company will have plans in place to survive it.

Ensure Sourcing

As your business reopens, make sure your sourcing is taken care of. Existing vendors may face problems with supply, making it necessary for your company to ensure that alternative sources are identified, evaluated and categorized for immediate reference in case you need their services. Good vendor management will be key in maintaining company production.

Boost Liquidity

With the Government planning to release large amounts of liquidity into the markets, CFOs must ensure that their company?s cash and liquidity is up to the mark, and bolstered by the government?s plans. Financing should be re-visited; debt and credit should be scrutinized afresh. Receivables especially need to be managed urgently as customers will tend to delay payments to meet their own challenges. Tax planning in Covid situation is also critical, and conserving cash in short-term periods must be ensured. With the GOI announcing extension Of TDS returns due dates, GST returns and various other compliances, many opportunities have arisen to make such savings. For MSMEs, government has delayed the GST payment and is also evaluating the GST payment only upon collection form Customers. You must consider all possible opportunities of boosting company?s liquidity.

Optimize Assets

Optimizing your company?s assets is just as essential. Making sure that every single asset is relevant to your recovery must take precedence over other tasks. Evaluate your current assets to identify which of them will be relevant.

Ensure Social Distancing in Office

As the offices reopens and MHA announcing the unlock guidelines on almost every day basis, it is critical for companies to follow such guidelines. Maintaining Social distancing while having meeting and calling employee to work from office is critical to avoid any mishaps in the company.

Reduce Human Dependence

CFOs must prepare for the possibility of many critical employees (including themselves) falling ill and getting taken out of commission by COVID-19. This means that they need to plan accordingly, and make sure that a framework is in place to ensure through which all financial processes can function with remote supervisory inputs from top management. Cloud ERPs can be very handy in these situations.

Streamline Communication with Stakeholders

Amidst the uncertain economic landscape, CFOs must ensure clear and constant communication with key stakeholders. Communication should be automated, and there should be a smooth flow between stakeholders, banks, investors and employees when communicating with each other.

Investor communication is going to be of utmost importance to avoid uncertainty on their part. Investors will want to be updated with your company?s activities to handle the crisis, and stay ensured that their investments are secure.

3. Plan for the Recovery

It is never too early to plan for the recovery of the economy, even though we can?t say how soon that will take place. CFOs must consider all the different methods in which the market can return, despite social distancing and COVID-19 regulations. Once the market returns, there will be heavy competition amongst companies to recover their losses, and only those with plans already in place will come out in the lead.

4. Digitize the Process

Covid has proven that Cloud ERPs are the future. Many companies who didn?t implemented cloud ERP or e-procurement software has suffered more than companies which had these in some form or other. Demand for Cloud software has surged during the lockdown. CFOs must evaluate their existing business process and look out for affordable cloud ERP to digitize their business process.

Get the benefits you deserve with TYASuite Cloud ERP

TYASuite is here to help you with affordable Cloud ERP. With our plug and play cloud ERP software, cloud procurement to pay software (P2P software), Cloud Inventory Management software, Cloud Assets Management Software, Project Management Software, bring all your business processing in one single platform, and have complete access over remote cloud-based applications.

TYASuite Cloud ERP is scalable, flexible and customizable ERP and you can go live just in 7 Days. It is enriched with best of the features and is affordable cloud ERP.

Sign up today for a FREE DEMO, and get 3 months usage of our tools for no cost!

The COVID-19 outbreak has left the world reeling, and the global economy has been suffering worse and worse damage over the last couple of months. Almost every single business in the world has been affected, and desperately searching for solutions to recover. Even the essential services industry has suffered due to lower demand. The combined effects of human health and welfare, disruption of the supply chain and massive changes in consumer behaviour and buying power has left companies in need of rapid adaptation and change to survive in the present circumstances.

Many Companies across the globe has done mass lay-offs, put the employee on mandatory unpaid leaves and have reduced the salaries of remaining employees.

Governments are coming up with Covid revival package for MSEs and industries.

For businesses around the world, the first and foremost form of possible relief has come from the use of technology, especially digital technology, to adapt to these changes. From online payment services, digital communication platforms to virtual business processing, management and Cloud ERP Software, digital technology, the internet and telecommunications have been able to prevent a complete worldwide shutdown of all businesses.

To survive this pandemic and consequent economic downturn, businesses around the world, especially small businesses and startups, need to implement certain changes in their operations. For the Indian economy, the MSME sector will largely lead and decide the recovery from the possible upcoming recessions, and hence they must -

Digitalize and Automate

The Indian MSME sector is witness to an existing problem of companies, especially small and micro-enterprises, delaying or refusing the implementation of digital technology for their business processes. This can no longer persist as any organizations who do not embrace digital whole heartedly have little to no chance of survival in this current ecosystem. Tech-savvy companies have already demonstrated the ability to overcome COVID-19 restrictions through the implementation of cloud services, mobile apps, AI-ML software and social media, to counter the prevention of human contact due to social distancing and quarantine rules. Small businesses must learn from these examples and begin transferring all possible processes from manual setups to digital cloud-based platforms like Cloud ERP, Cloud Project Management Software, Inventory Management software, Procurement to pay software and many more.The Cloud Business Software will also help maintaining social distancing.

Get Ready for Work-From-Home

New strategies and processes need to be formulated and implemented immediately to facilitate a work-from-home setup. Companies worldwide have already begun to face the need to adapt to maintaining an almost entirely remote workforce, and this will continue well into the future. To gain the edge over competition, a proactive stance must be assumed by founders, CEOs and top management towards work-from-home including the deployment of company-wide awareness and training in efficiency and productivity protocols. Ensuring productivity while work from home is important to companies as well as employees.

To facilitate a rapid shift to remote working models, companies must ensure ?

1. Negotiate with infrastructure vendor to support remote workforce demands: All the technological requirements for remote work must be available to your employees, including hardware, software and telecommunication devices. Companies should pre-negotiate high volume network and internet facilities with providers, and implement efficient collaboration technologies including video-conferencing tools, file-sharing and cloud ERP software to ensure that poor bandwidth, connectivity and lack of cloud ERP doesn?t hamper the employee productivity.
2. Optimized infrastructure costs and management: As more employees will start working from home, companies need to re-evaluate their infrastructure maintain on-premise, and balance that with new potential costs to provide infrastructure to employees at their homes, such as laptops, advanced internet connections, security software and reimbursements for telephone and internet expenses.High level on-premise infrastructure such as servers, desktops, office-wide bandwidth, seating facilities, etc. will become useless, and all related assets should be repurposed.

Shift Everything to Cloud

Companies who had implemented cloud-computing technologies in their business process before the COVID-19 crisis hit, have already seen how much it has helped them get through the lockdown conditions. Other companies must take the hint and migrate their operations to cloud, in preparation for the times to come. There will be an increased demand for work-from-home, and that will naturally put a lot of stress on the IT infrastructure. The main advantages of using cloud technology to meet this demand are the inbuilt security and automatic scalability of cloud structures.

As the economy reopens, companies will be bound to bow down to situation and inculcate work from home culture.SMEs will not have any tech bandwidth or the budget to get required infrastructure on -premises. The only option SMEs and Start-ups will have is to look for affordable SaaS software. There will be many options in the market and choosing the right one that fits into your business requirement and is affordable will be important.

Companies who aren?t used to handling a big IT load need not hire new IT staff and procure infrastructure just to shift their operations to digital, they can leave that to dedicated cloud service providers. Cloud ERPs for example, will become a necessity in coming times. Cloud ERP can allow your business processes to transform to a digital platform, without any effort on your part. Simple subscriptions to customized plans allow you to integrate the ERP into your system.

Reduce Human Dependence

It must be obvious with the earlier given points and the current conditions that businesses cannot depend as heavily as before on human agency and interactions. With the new social distancing rules, businesses must use automation and technology to reduce human dependence drastically, and transfer as much of the processing tasks as possible, to machines and software. The easiest way to do this is again by implementing cloud ERP that can automate all menial and repetitive tasks, leaving only critical decision making to human employees. With reduced workforces and the need to cut back on expenses, such process automation will become essential to small and medium businesses.

Conclusion

Though there is no amount of preparation that can guarantee a business?s success in the trying times to come, it is quite safe to assume that only those companies that adapt with the times and make the best use of technology will have any hope for growth and survival. As the COVID-19 curve is flattened, technologically equipped companies will be able to get back into business without any extra hassle.

Get the benefits you deserve with TYASuite

Are you ready to make entry into the new era of Digitalization?

TYASuite is here to help you with affordable business software. With our plug and play cloud ERP software, cloud procurement to pay software (P2P software), Cloud Inventory Management software, Cloud Assets Management Software, Project Management Software, bring all your business processing in one single platform, and have complete access over remote cloud-based applications.

TYASuite Cloud ERP is scalable, flexible and customizable ERP and you can go live just in 7 Days. It is enriched with best of the features and is affordable cloud ERP.

Sign up today for a FREE DEMO, and get 3 months usage of our tools for no cost!

Fighting COVID-19 - Social Distancing

The COVID-19 pandemic has spread in an unprecedented way across the entire planet, and it is showing no significant signs of slowing down or getting contained. The global economy has suffered greatly due to the lockdowns and disruptions in the supply chain, but it is slowly beginning to recover. As businesses reopen, and the world begins to regain functionality, social distancing rules are a must for everyone to ensure that the pandemic stays under control.

Why Social Distancing?

Social distancing rules ensure that the COVID-19 virus does not get a chance to spread from potential carriers to healthy people. Most businesses require daily contact between employees, vendors, customers and other stakeholders. Ignoring social distancing can mean a complete breakdown of the recovery process, and an increase in the outbreak of COVID-19. With the blanket ban on any such contact, businesses must function through digital means of communication, collaboration and management.

Consequences of Social Distancing

Enforcing social distancing guidelines in a business has several consequences, as the limited space and resources of a business cannot deal with the requirements to function normally. Simply speaking – no business can afford to go on normally with all employees maintaining a 6-ft gap at all times!

This means that certain consequences will be felt, such as –

1. Disruption of Supply Chain: Businesses will have to deal with very unstable supply chains, and find alternative methods of procurement to ensure continued production. Social distancing means that all logistics transport and related labour personnel cannot interact with each other normally and hence function like they used to.
2. Remote workforce: The majority of staff in companies will have to get used to working from home on rotation basis, as social distancing will not allow for the normal volume of employees to function inside the limited office/shop area. All the personnel whose physical presence is not essential will need to provide their services from home, and companies will have to facilitate the same efficiently.
3. Reduced physical interaction: The physical interactions that are common in business, such as employee-employee or employee-customer or employee-vendor interaction, will all need to cease as much as possible. All these interactions must hence be turned digital to the extend possible.

Businesses have found a common solution to deal with social distancing requirements and quarantine conditions – cloud ERP software. By automating their business processes and eliminating unnecessary human dependence, cloud ERP software is helping businesses stay alive without the need for regular human-to-human contact.

The Answer - Cloud ERP Software

Cloud ERP Software will be the ultimate solution to help businesses facilitate social distancing, and help them through lockdown or quarantine conditions. Since social distancing is going to become a long-term requirement (even after the lockdown is lifted), businesses must search for cloud ERP software that can provide matching long-term solutions.

Cloud ERP Software can help a business in various ways when it comes to social distancing and fighting the spread of the COVID-19 pandemic –

Limiting Physical Contact through Digitalization of Business Process

Physical contact must be avoided at all cost, and this includes more than just the obvious human-to-human contact by touch or proximity. The COVID-19 virus is extremely contagious, and can spread through indirect contact via surfaces, paper, cloth, tools, etc. With cloud ERP software, you can avoid all paperwork and physical contact by digitizing your data and transferring everything to a cloud storage facility.

Automated Business Processes

By implementing cloud ERP software, business processes can be automated and streamlined, eliminating the need for unnecessary, tedious and repetitive manual labour. Automating fixed everyday tasks and processes can also provide the additional benefit of eliminating human-error, something that is commonly seen when menial tasks are concerned. With modules such as procurement to pay, inventory management and compliance management, a lot of such menial everyday tasks become the ERP software’s headache instead of your employees’.

Facilitating Work-From-Home

With cloud ERP modules such as project management, finance and accounting, sales and CRM, a large part of any company’s workforce can function remotely. Such ERP software will allow the employees to function efficiently and stay productive despite work-from-home situations, since all the data is integrated in one platform, and there is seamless communication and collaboration.

TYASuite Cloud ERP Solution

Choosing to implement cloud ERP software is not always simple, especially for SMBs and Start-ups. There are many factors to consider, and making the wrong choice can leave you with an ERP that is ill-suited to your business, not worth the investment and a waste of your precious time and money.

This is why TYASuite Cloud ERP Solutions provides you with the best possible choice. Specially designed to fit the needs of any business, irrespective of size and nature, the TYASuite Cloud ERP is –

Affordable

With customized pricing plans and a pay-as-you-grow approach, you decide how much you want to spend, and how much you want in return. The TYASuite Cloud ERP software is customizable to your specific needs to ensure maximum ROI and minimum implementation costs.

Scalable

Regardless of your business size, the TYASuite Cloud ERP software is a one-size-fits-all solution. With customized plans for different scales of business, you can start wherever you like, and scale up or down based on your evaluation of the software’s performance and efficacy with regard to your business processes and specific requirements.

Flexible

Unlike traditional or big-brand ERPs that have on-premise software, the TYASuite Cloud ERP is flexible to adapt and suit your business’ existing processes and functions. With integrated modules for each functionality, you choose what you need, and fit the pieces accordingly.

Plug and Play ERP

TYASuite Cloud ERP is the world’s 1^st Plug and Play ERP Solutions. It has 2000+ pre-customized features which can be modified to suit your requirement in the click of a button. Join the plug-and-play ERP movement and enjoy the benefit of going live within 7 days with your own process. Never compromise with your requirements.

With our full deck of ERP tools, get access to Procurement to Pay, Project Management, Inventory Management, Asset Management, Vendor Management, Finance and Cloud Accounting modules to make sure you stay on top of the coming economic revolution. Never miss out on important news, manage your business seamlessly and enhance your profitability by going digital with TYASuite.

Sign up today for a FREE DEMO, and get 3 months usage of our Cloud ERP for no cost!

Are you stuck with inflexibility and heavy cost of your existing ERP software? Talk to TYASuite Experts on how to get Flexible, Affordable and Plug and Play Cloud ERP.

Is your company considering the implementation of an Enterprise Resource Planning (ERP) software to help you go digital and automate your business processes. You might be facing some common problems of ERP implementation -

1. Will it streamline my operations after months/quarters of implementation time?
2. Will the cost justify the benefits?
3. Do I need to change my process just to adapt to the inflexible ERP?
4. Can my existing team handle the transitional work load?

ERPs can be very complicated systems, fraught with technical difficulties, implementation errors and on-going bugs and maintenance issues.

The most important question that bothers companies is – which ERP shall they choose? There are big names in the ERP market, and some of the biggest are SAP, Microsoft Dynamics 365 and Oracle EVS / Netsuite. With a long history of existence in ERP Market and numerous clients, they certainly seem like good options at first, but are you sure they’ll be the right choice for you? If you are large enterprise and very profitable company, then yes, these Industry stalwarts can be a suitable choice for you.

However, if you are a Small or Medium enterprise, or a start-up who need to scale and bring profitability in your business, you will need to look for alternatives to SAP/Oracle/Netsuite etc.

Considering the advancement in technologies over last few years, you must evaluate some factors before finalizing any ERP :

1. Cost

There are 4 types of costs involved in any ERP :

1. One-time onboarding cost
2. One-time Implementation cost
3. Annual Fixed License fee
4. Per user charges

You must evaluate the overall ERP cost for at least next 5 year and then compare available options in the market. Many ERP companies run special ERP offers for MSMEs and Startup’s to ensure that they can afford the ERP.

2. Process Adoptability

One must understand the ERP functionality in detail and ensure that your company process can be streamlined with ERP Implementation. Many ERP projects fail as the companies select ERPs based on hearsay and when they start implementation, they realize their company process is very different and the selected ERP either may not suit their purpose or significant customization costs need to be incurred to make it usable. It becomes a bottleneck and delays the entire process.

3. ERP Modules

All ERPs will have multiple modules which are inter-linked. One must check the functionality of each module to ensure that it fits into the requirements. A few of the most common modules are mentioned below and must be integrated seamlessly into each other :

1. Procurement to Payment Software
2. Inventory Management Software
3. Asset Management Software
4. Revenue Process Software
5. Finance Module
6. Project Management Tool

Companies must go through details functionalities of all modules and ensure that it fits into your company process without major customization.

4. Inflexibility

As mentioned before, ERPs can be extremely complicated things. There are entire divisions in the IT consulting industry dedicated to providing ERP consultation services, and that will be more to add to your staff list. For example, SAP consultants exist solely to help companies use the SAP ERP software, and they are specially trained to use it like experts. Without that extra ERP consulting staff, buying SAP would be like getting a complicated Lego set for your toddler – you’ll spend a lot of money but they won’t be able to utilize it to its actual potential.

It is the time to rethink, do you really need inflexible ERP while there are many Flexible ERP is in the market. It is the era of Plug and Play ERP. Why would you choose ERPs which take months to go live and then after going live struggle for months to streamline the business processes? Always choose the ERP which can go live faster.

If one follows the above steps, they will be able to streamlines process in their company much faster and at affordable cost.

Choose TYASuite Cloud ERP!

If you’re worried by what you read above, don’t be! ERP doesn’t need to be complicated, costly or restricted to large-scale businesses only. There is an affordable, scalable and flexible ERP choice for your problems – the TYASuite Cloud ERP Solution.

The TYASuite Cloud ERP Solution is a fully-stacked software suite with integrated modules to automate, streamline and digitalize all of your business processing. Eliminate all the hassle, error and loss incurred due to tedious manual processing of repetitive menial tasks and transform your business and go digital with our cloud-based plug-and-play ERP solution. The TYASuite cloud ERP contains separate modules for Procurement to Pay Software, Project Management Software, Compliance Management Software, Vendor Management Software, Inventory Management Software and a host of other back-office business processes – all integrated into one simple, plug and play ERP.

Key Benefits of TYASuite Cloud ERP :

Affordable

If you’re on a limited budget, TYASuite Cloud ERP Solution is the most obvious choice! It provides the most affordable option while ensuring that no compromises are made with quality, functionality and scope of the product.

Scalable as you grow

Unlike big brands like SAP, Oracle Netsuite or Microsoft Dynamics 365 which are designed for large-scale companies with immense operation volume only, the TYASuite Cloud ERP solution is scalable to your business size. If you are a small or medium business, our product will be a perfect fit to help you automate your business within its own scale and scope. If you are a large business, our product will scale itself to match your operations just as easily. If your business is planning to undergo rapid expansion, our product will scale with you as your business grows, and you won’t need any change of ERP for your future.

Flexible

If you’re not sure whether you need all the features of a full stacked ERP suite, no problem! TYASuite Cloud ERP Solution is flexible and can adapt to your specific needs. With an SaaS model, you can subscribe to our products for as long as you need them, and for whichever modules you want to. Our product has complete integration through all modules, and can take care of all your ERP needs through a single, easy-to-use plug-and-play platform, with no need for costly hardware or consultants. Simply sign up for our services and go live within 7 days get constant support, due maintenance and regular updates at no extra cost.

Plug and Play ERP

TYASuite Cloud ERP is World 1^st Plug and Play ERP Solutions. It has 2000+ pre-customized features which can be modified to suit your requirement in click of a button. Join Plug and Play ERP movement and enjoy the benefit of going live within 7 days with your own process. Never compromise in your requirements.

Prime Minister Sri Narendra Modi emphasized the importance of a ‘Self Reliant India’ in fighting the COVID-19 crisis during his speech on May 12^th, 2020.

The Core focus of his speech was “Go Local”, “Be Vocal” and “Make it Global”. He announced a recovery package of Rs. 20 lakh core which approximates 10% of India’s GDP. The package is targeted to cater to various sections including cottage industry, MSMEs, laborers, farmers & middle class.

His vision for a Self-Reliant India will stand on the following five pillars:

1. Economy - Which brings quantum jumps and not incremental jumps
2. Infrastructure -Which should become the identity of India
3. System - Which are based on 21^st century technology
4. Vibrant Demography - Which is our source of energy for a Self Reliant India
5. Demand - Whereby our demand and supply chain should be utilized to full capacity

Let’s look at how you can benefit from the Rs. 20 lakh Crore package:

1. Financial aid for the MSME sector:

The MSME Sector has been selected to receive the lion’s share of help, and rightly so as they need it the most, and we need them the most. Separate classifications for manufacturing and service sector are to be removed, and composite criteria for their definitions were identified as follows –

1. Micro – Investment <1 Cr & Turnover <5 Cr
2. Small – Investment <10 Cr & Turnover <50 Cr
3. Medium – Investment <20 Cr & Turnover <100 Cr

With these new definitions for MSMEs, there will hopefully be more registrations and a reduced fear among businesses to not qualify within the criteria. MSMEs are going to be the direct benefactors of financing and liquidity provisions, offered in the form of –

Subordinate Debt for Stressed MSMEs – Rs. 20,000 Crores

Stressed MSMEs in need of equity support will receive a net amount of Rs. 20,000 cr as subordinate debt from the Govt. Any functioning MSMEs that are NPA or are stressed will be eligible, and an estimated 2 lakh businesses are expected to benefit. The Govt. will also release a support of Rs. 4000 Cr to CGTMSE, to be provided to banks as partial Credit Guarantee support. The banks will give debts to promoters of MSME, to infuse as equity in the units.

Collateral-Free Automatic Loans for Businesses including MSMEs – Rs. 3,00,000 Crores

There has been a massive shutdown of MSMEs and businesses unable to meet their operational liabilities or raw material costs. Banks and NBFCs are to now provide an Emergency Credit Line to Businesses/MSMEs of up to 20% of the entire outstanding credit as on 29.02.2020. This scheme is to remain available till 31.10.2020, and carry no guarantee fee or fresh collateral. The Government hopes that this scheme will allow approximately 45 lakh units to resume business activity and safeguard jobs. The details of the loan terms are -

1. Borrowers with upto Rs. 25 Cr outstanding and Rs. 100 Cr turnover will be eligible
2. Loans will have a 4 year tenor with a moratorium of 12 months on Principal repayment
3. The interest is to be capped
4. 100% credit guarantee cover will be given to Banks and NBFCs on principal and interest

Equity Infusion for MSMEs through Fund of Funds – Rs. 50,000 Crores

To address the severe shortage of equity faced by MSMEs, a Fund of Funds with a Corpus of Rs. 10,000 Cr will be set up. The FOF will be operated through a Mother Fund and a few daughter funds, helping to leverage Rs. 50,000 Cr at the daughter fund level. This funding will be for MSMEs with growth potential and viability, and hopes to expand MSME size as well as capacity, encouraging MSMEs to get listed on the main board of Stock Exchanges.

Along with the financial support offered by the scheme to MSMEs, there are a few provisions designed to benefit their chances of recovery and survival by boosting the market demand and delivery capability of the MSMEs –

1. Global tenders of upto Rs. 200 Cr to be disallowed – to ensure that Indian MSMEs can find sufficient market demand and not face unfair competition from foreign companies
2. E-marketing linkage for MSMEs is to be promoted as a replacement for trade-fairs, exhibitions and other forms of marketing that have been banned due to COVID-19
3. All receivables for MSMEs from the Govt. and CPSEs are to be released within 45 days
4. FinTech will be used to enhance transaction based lending using the data generated by the e-marketplace

Our comments:

Based on above, it seems that MSMEs, who have never availed any loan so far which not be able to get the support under this scheme. The purpose of this scheme may get lost. Government must clarify on this point. Further, the point of contention of funds of fund will always be valuations. Government must come up with the guidelines for the valuations in such cases. The only way for MSMEs at large seems to be through promotor route where promotor will take personal loan and put into MSME as equity.

2. Employees' Provident Fund Support:

The Employees’ Provident Fund Organization (EPFO) has announced that the government will support employees and businesses with a combined amount of Rs. 2500 crore and Rs. 6750 crore Liquidity Support. Extending earlier support, and making new provisions for benefits to be applicable to about 6.5 lakh establishments covered under EPFO and about 4.3 crore such employees, the scheme stated –

1. Under the Pradhan Mantri Garib Kalyan Package (PMGKP), payment of 12% employer and employee contribution will be made into EPF accounts of eligible establishments for another 3 months – June, July and August 2020 (applicable for Employee having salary less than Rs. 15,000 and upto 100 employees)
2. Statutory PF contribution for employer and employee to be reduced to 10% (from existing 12%) for all establishments for 3 months (i.e. till August 2020)
3. 5 crore workers registered under the EPFO scheme are to get non-refundable advance from their account which will be the lower of 75% of the total amount or three months of wages
4. CPSEs and State PSUs to continue to contribute 12% as employer contribution

Our comments:

This can be some relief the MSMEs where 24% cost can be saved on their payroll cost for employees whose salaries are less than Rs. 15,000. Larger MSMEs can save upto 4% of salary cost from this provision. However, most of the companies work on CTC model and this may not directly benefit to the company unless the companies announces a salary cut.

3. Direct Tax Measures:

In order to provide more funds at the disposal of the taxpayers, and release Liquidity of Rs. 50,000 crores, the rates of Tax Deduction at Source (TDS) for non-salaried specified payments made to residents and rates of Tax Collection at Source (TCS) for the specified receipts shall be reduced by 25% of the existing rates through the entire FY 2020-21 i.e. till 31^st March 2021. This reduced rate will be applicable to payment for contract, professional fees, interest, rent, dividend, commission, brokerage, etc. Refer our blog on Revised TDS rates for New TDS rates.

Additionally, several due-dates have been revised, such as –

1. Tax audit due date has been extended till October 31^st, 2020 ( from existing September 20^th)
2. Due date for filing of income tax returns has been extended till November 30^th, 2020 ( from existing July 31^st and October 31^st)
3. Assessments getting barred on September 30^th, 2020 extended till December 31^st, 2020, and those getting barred on March 31^st, 2021 extended till September 30^th, 2021
4. Period of ‘Vivad se Vishwas Scheme’ for making payment without additional amount will be extended to December 31^st, 2020
5. All the pending income-tax refunds up to INR 5 lakh to charitable trusts and non-corporate businesses & professions including proprietorship, partnership, LLP and Co-operatives shall be issued immediately

Our comments:

This provision will definitely give some liquidity in the market. However, there will not be any immediate benefit on the same because most of the companies are delaying their payments to their suppliers. Considering the current situations, where most of the MSMEs may go into red, Government shall come out a Zero TDS auto approval scheme for all MSMEs where they can apply a Zero TDS certificate and it can be auto approved for FY 2020-21 (AY 2021-22). This can be a breather to MSMEs.

Immediate Tax refunds to MSMEs is definitely a great relief. Many MSMEs has already received this refund. Extending the due date is not a relief as such because the Indian business are very much used to due date extensions in the past and this doesn’t have any financial relief. Government must differentiate between the financials relief and procedural relief under Covid.

4. Support for NBFCs/HFCs/MFIs:

Amidst the difficulties faced by NBFCs/HFCs/MFIs in raising money in debt markets, the Govt. will launch a Rs. 30,000 crore Special Liquidity Scheme, to make investments in both primary and secondary market transactions in investment grade debt paper of NBFCs/HFCs/MFIs. The securities will be fully guaranteed by the Govt. and RBI/Govt. measures will be supplemented to augment the liquidity.

Furthermore, those NBFCs/HFCs/MFIs whose credit rating is too low, will be given liquidity to do fresh lending to MSMEs and individuals via the extension of the PCGS to PCGS 2.0 whichwill also cover borrowings such as primary issuance of Bonds/CPs of such entities. The Govt. will bear the first 20% of the losses. This is estimated to release liquidity of up to Rs. 45000 Crore.

Our comments:

This measure is expected to have some impact on MSMEs getting funds form NBFCs/HFCs and MFIs.

5. Support for DISCOMs:

Power Distribution Companies (DISCOMs) are also at a very low point due to plummeting revenues and unprecedented cash flow problems. Currently, the DISCOM payables to Power Generation and Transmission Companies (Gencos) are ~ Rs 94,000 crore. The Govt. will inject liquidity of Rs.90,000 crore to DISCOMs against receivables through loans given against State guarantees for the exclusive purpose of discharging liabilities of Discoms to Gencos.

The DISCOMs will be required to perform specific activities/ reforms in linkage to these loans, such as –

1. Digital payments facility by Discoms for consumers
2. liquidation of outstanding dues of State Governments
3. Plan to reduce financial and operational losses

Central Public Sector Gencos will give a rebate to Discoms, which shall be passed on to the final consumers (industries).

Our comments:

Government should have looked into giving some direct relief to MSMEs in terms of waiving fix load charges for next 6 months. That could have benefited the MSMEs directly in lowering their outflow.

6. Miscellaneous support actions:

Various other measures to help support the industry, especially MSMEs and small businessmen, are being arranged for, including –

7. Relaxation in Statutory and Compliance Matters:

Statutory regulations and compliance requirements are getting temporarily relaxed to encourage economic recovery –

1. Extending last date for Income Tax Returns to June 30^th, 2020
2. Extending filing GST returns to end of June 2020
3. 24*7 custom clearance till 30^th June, 2020
4. Relaxation for 3 months for debit cardholders to withdraw cash free from any ATMs, etc
5. Allowing payment before 15^th May, 2020 for Motor Vehicle and Health Insurance Policies
6. Mandatory Board meetings extended by 60 days till 30^th September
7. Allowing Extraordinary General Meetings through Video Conference with e-voting/simplified voting facility

Our comments:

No financial relief. These are just procedural relief and not going to have any implications on MSME survival.

8. Measures taken by the RBI:

The Reserve Bank of India has been requested by the Govt. of India to provide relied for the economy, and has raised the Ways and Means advanced limits of States by 60% and enhanced the Overdraft duration limits. Additionally, the following measures were also taken –

1. Moratorium of three months on payment of installments and payment of Interest on Working Capital Facilities in respect of all Term Loans
2. Easing of Working Capital Financing by reducing margins
3. Reduction of Cash Reserve Ratio (CRR) has resulted in liquidity enhancement of Rs. 1,37,000 crores
4. Targeted Long Term Repo Operations (TLTROs) of Rs. 1,00,050 crore for fresh deployment in investment grade corporate bonds, commercial paper, and non-convertible debentures
5. TLTRO of Rs.50,000 crore for investing them in investment grade bonds, commercial paper, and non-convertible debentures of NBFCs, and MFIs
6. Increased the banks’ limit for borrowing overnight under the marginal standing facility (MSF), allowing the banking system to avail an additional Rs. 1,37,000 crore of liquidity at the reduced MSF rate
7. Announced special refinance facilities to NABARD, SIDBI and the NHB for a total amount of Rs. 50,000 crore at the policy repo rate
8. Announced the opening of a special liquidity facility (SLF) of Rs. 50,000 crore for mutual funds to alleviate intensified liquidity pressures
9. For loans by NBFCs to commercial real estate sector, additional time of one year has been given for extension of the date for commencement for commercial operations (DCCO)

Our comments:

These measures are expected to solve liquidity issues in the market, which is essential in the current scenario. However, there is no direct benefits to MSMEs in the country.

9. Relief measures for Contractors:

Certain relief measures are being put into place for contractors to ensure that construction stays alive and begins recovering example

1. Extension of up to 6 months (without costs to contractor) to be provided by all Central Agencies (like Railways, Ministry of Road Transport & Highways, Central Public Works Dept, etc.) This will cover construction/works and goods and services contracts and obligations like completion of work, intermediate milestones and extension of concession period in PPP contracts
2. Government agencies to partially release bank guarantees, to the extent contracts are partially completed, to ease cash flows

Our comments:

These measures are expected to help a lot of MSMEs who had given bank guarantees on government projects. Bank guarantee also cost money to MSMEs and this will help them to reduce their cost.

10. Relief measures under RERA:

The adverse effects of the COVID-19 lockdown and quarantines put projects in risk of defaulting on RERA timelines, and timelines need to be extended. These measures taken by the Ministry of Housing and Urban Affairs will de-stress real estate developers and ensure completion of projects so that home buyers are able to get delivery of their booked houses with new timelines, by advising States/UTs to –

1. Treat COVID-19 as an event of ‘Force Majeure’ under RERA
2. Extend the registration and completion date suo-moto by 6 months for all registered projects expiring on or after 25^th March, 2020 without individual applications
3. Regulatory Authorities may extend this for another period of upto 3 months, if needed
4. Issue fresh ‘Project Registration Certificates’ automatically with revised timelines
5. Extend timelines for various statuary compliances under RERA concurrently

Our comments:

Since its enactment, RERA has given hard times to Builders. This interim relief will help real estate segments some breather in not falling into trap of RERA. However, real estate expected much significant government support to boost the demand. Considering the existing level of real estate inventory in the country, if immediate steps are not taken by government to boost real estate demand, it will be a challenging situation for this sector.

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