When India went into lockdown in March 2020, the government, regulators, and the Reserve Bank of India quickly introduced a series of relief measures to support businesses, workers, and vulnerable citizens. These measures covered compliance relaxations, direct economic relief for the poor, and steps from the RBI to ease liquidity and credit flow. Together, they aimed to provide immediate breathing space to taxpayers, companies, farmers, daily wage earners, and the financial sector at large.
The following sections explain these measures in detail, following the same structure as the source document.
Part A – Compliance Relief
2.1 Income Tax
The due date for filing belated and revised returns for FY 2018–19 was extended from 31 March to 30 June 2020. Similarly, the Aadhaar-PAN linking deadline was moved to 30 June. Under the Vivad se Vishwas scheme, no additional 10% payment was required if tax dues were cleared by the new deadline.
Multiple statutory timelines across laws such as Wealth Tax, Benami Property, Black Money Act, and Equalisation Levy were shifted to 30 June if they originally expired between 20 March and 29 June.
Investments for tax deductions under Sections 80C, 80D, and 80G were allowed until 30 June, giving individuals more time to plan savings. The commencement of operations for SEZ units under Section 10AA was also pushed.
For delayed payments of advance tax, self-assessment tax, TDS, and other levies, the interest rate was reduced to 9% instead of the usual 12–18%, with no penalties or late fees. Contributions to the PM CARES Fund were made eligible for 100% deduction under Section 80G of the Income-tax Act.
2.2 GST/ Indirect Tax
GSTR-3B returns for February to April 2020 were deferred to the last week of June without late fees or penalties. Larger taxpayers faced reduced interest at 9% after a short grace period.
The date for opting into the composition scheme and filing returns for FY 2019–20 was extended. All notices, appeals, and other procedural requirements expiring between March and June were extended to 30 June.
Customs clearances were kept operational 24×7 until June-end to ensure uninterrupted supply of goods. Additionally, provisions were added to empower the government to extend compliance deadlines in future force majeure events.
2.3 Corporate Affairs
The Ministry of Corporate Affairs announced a moratorium period from April to September 2020 where no additional fees were charged for late filings with the RoC. This also allowed companies to clear past backlogs.
The gap between two board meetings was extended by 60 days, giving more flexibility, though the requirement of holding four meetings annually remained. Independent directors were allowed to communicate informally rather than holding a physical meeting.
Approvals for financial statements could be taken through video conferencing, even without physical quorum. The applicability of the new CARO 2020 was deferred by a year.
Deadlines for deposit repayment reserves and investment in debentures were moved from April to June. Newly incorporated companies received extra time for filing the commencement of business declaration. The requirement of a resident Indian director was relaxed for FY 2019–20.
The threshold for default under IBC was raised sharply from Rs. 1 lakh to Rs. 1 crore, providing breathing space to stressed companies. CSR spending on COVID-19 activities and contributions to PM CARES were declared as eligible CSR expenditure.
2.4 Securities Exchange Board of India (SEBI)
SEBI extended timelines for filings such as compliance certificates, investor complaints, secretarial compliance reports, shareholding patterns, and financial results for March 2020. Listed companies received more time to submit quarterly and annual disclosures.
Board and committee meetings were exempted from the usual 120-day gap requirement until June. The top 100 listed companies could hold AGMs up to September 2020.
Disclosures in offer documents for debt instruments could use slightly older financials, and publication of notices in newspapers was exempted until mid-May.
2.5 Department of Commerce and 2.6 Directorate General of Foreign Trade (DGFT)
Extensions were granted for filing MEIS and SEIS applications, validity of status holder certificates, and norms committee ratifications. The validity of advance authorisations was increased, and export obligation periods were extended by six months.
Deadlines for Replenishment Authorisations, RoSCTL benefit applications, EPCG compliances, and installation certificates were all relaxed. EOUs, STPs, and EHTPs received deemed extensions of approvals until December 2020.
2.7 Financial Services
Banks waived charges for withdrawing cash from ATMs of other banks, removed penalties for not maintaining minimum balances, and reduced charges for digital trade transactions.
2.8 Department of Fisheries
Specific relaxations were announced for the fisheries sector, though not detailed in this note.
Part B – Economic Relief to Poor and Marginalised
2.9 Medical Insurance cover
A special insurance cover of Rs. 50 lakh per person was introduced for healthcare workers, including doctors, nurses, sanitation staff, and paramedics. This covered nearly 20 lakh frontline workers at no cost to them.
2.10 Pradhan Mantri Garib Kalyan Anna Yojana
Under this scheme, 5 kg of wheat or rice per person was provided free in addition to existing entitlements. One kg of pulses per household was also included. Nearly 80 crore people, about two-thirds of India’s population, benefited over three months.
2.11 Direct Benefit Transfer (DBT)
Farmers received the first instalment of Rs. 2,000 under PM-Kisan in April, directly benefiting over 8.6 crore families. MNREGA wages were raised from Rs. 182 to Rs. 202, creating an additional income of Rs. 2,000 per worker for 5 crore families.
Poor widows, senior citizens, and persons with disabilities received Rs. 1,000 as ex-gratia support, split into two instalments. Around 3 crore people benefited.
Women Jan Dhan account holders received Rs. 500 per month for three months, directly supporting 20 crore women.
2.12 Others
Free LPG cylinders were provided for three months to 8.3 crore households under the Ujjwala scheme.
Self-Help Groups were given higher collateral-free loans, with the limit doubled from Rs. 10 lakh to Rs. 20 lakh.
2.13 Benefits to the Organized Sector
For establishments with up to 100 workers and 90% of employees earning less than Rs. 15,000, the government paid both employer and employee contributions to EPF for three months.
Employees were also allowed to withdraw up to 75% of their EPF balance or three months’ wages, whichever was lower, as a non-refundable advance. This supported 4.8 crore workers.
State governments were directed to use the welfare fund for construction workers and the District Mineral Fund for COVID-related health activities.
Part C – Relief Measures from RBI
2.14 Liquidity Injection in the Economy
The repo rate was reduced by 75 basis points to 4.40%, and the reverse repo was cut to 4%. The cash reserve ratio was reduced by 100 basis points, releasing Rs. 1.37 lakh crore liquidity. Together, these steps injected Rs. 3.74 trillion into the system.
2.15 Regulatory Measures
Banks were allowed to grant a three-month moratorium on all term loan instalments due between March and May 2020. Interest would still accrue, but repayments were deferred.
Working capital facilities also received a three-month deferment on interest. These changes were not to be treated as restructuring, ensuring borrowers’ credit histories were unaffected.
Lending institutions could reassess working capital cycles and reduce margins to ease pressure on businesses. The realisation period for export proceeds was extended from 9 to 15 months.
2.16 Other Initiatives/Measures by RBI
Implementation of the Net Stable Funding Ratio and the last tranche of the Capital Conservation Buffer was deferred. Long-term repo operations of Rs. 1 lakh crore were introduced.
Banks operating in IFSCs were allowed to participate in offshore rupee derivative markets. The WMA limit for states was raised by 30% to help them manage cash flow.
M2K Comments
The government and RBI exceeded expectations by acting swiftly and decisively. These measures may not drive growth immediately, but they prevented collapse and gave confidence to both vulnerable citizens and the financial system. By focusing on survival and stability, the relief package played a critical role in holding the economy together during the initial COVID-19 shock.
