Out Reach And Support to MSME Sector
- The most significant scheme out of 12 steps announced by the government is the loan within 1 hour
- 59-minutes loan- Narendra Modi said the first step taken by the government was to launch the 59-minute loan sanction portal, which will allow easy and quick credit up to Rs 1 lakh to small businesses. The other steps include Computerised random allocation & a time frame- 48 hours max will be given to file report for any inspection to an inspector, and they won’t decide which factory to go on their own. Computerised random allocation will decide which inspector goes where. Loan option- Loan option for GST registered firms will now be available through the GST portal itself.
- For the exporters seeking loans on pre-shipment and post shipment, the rebate has been increased from 3%to5%. Cash flow certainty- It will now be mandatory for companies with a turnover of more than Rs 500 crore to join Trade Receivables e- Discounting System (TREDS) so that MSMEs do not face trouble in cash flow
- Interest concession- Government to raise interest concession on loans for MSME exporters to 5% from 3%. PM Modi also requested large companies to clear bills of MSMEs expeditiously.
- Over 72,000 MSMEs have been granted loans through this portal.
Quick loan access- Government launches quick loan access scheme for up to Rs 1 crore for MSME sector. 2% rebate for loans up to Rs 1 crore for GST-registered MSME.
- MSME’s led by women- Mandatory for PSUs to procure up to 3 per cent from
- MSMEs led by women. Trade receivables and e-discounting systems- All companies with turnover of more than Rs 500 crore would have to now come on Trade Receivables e-Discounting System (TREDS) platform so that there is no cash flow problem for MSMEs.
- Pharma clusters for MSMEs- PM Modi said that government will set up pharma clusters for MSMEs. Centre to bear 70% of setup cost. He also said that the Govt is to offer Rs 6,000 crore technology upgradation package for MSMEs. Government e-Marketplace- Government e-Marketplace platform procurement mandatory for AIIPSEs. Environmental laws- Easing compliance with environmental rules, MSMEs will need single air and water clearance and just one consent to establish a factory. Relaxation in labour laws- MSMEs will have to file just one annual return on eight labour laws and 10 central rules.
- Modi added that an ordinance has been promulgated to simplify levy of penalties for minor offences under the Companies act.
Significance of MSME to India:
- MSME has such a huge potential to cater to the needs of masses in much decentralised level from products to services.
- It has tremendous potential for job creation and with a decent pay to uplift people from poverty especially form rural background.
- If MSME clusters are formed then it could potentially boost the GDP and make India 5 Trillion-dollar economy.
- The gains directly and indirectly will improve standard of living and raise the stature of India to become World power.
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