GS 3: Indian Economy | Planning, mobilization of resources, growth, development and employment

Why in News?

• Hon’ble PM has launched a historic support and outreach programme for the Micro, Small and Medium Enterprises (MSME) sector.
• As part of this programme, the Prime Minister unveiled 12 key initiatives which will help the growth, expansion and facilitation of MSMEs across the country.
• Five key aspects for facilitating the MSME sector
• Access to credit,
• Access to market
• Technology upgradation
• Ease of doing business and
• Security for employees
• Key Initiatives

Access to Credit:

59 minute loan portal:

• Loans uptoRs. 1 crore can be granted in-principle approval through this portal, in just 59 minutes.
• This portal will be made available through the GST portal.
• 2 percent interest subvention for all GST registered MSMEs, on fresh or incremental loans.

TReDS compliance:

• All companies with a turnover more than Rs. 500 crore, must now compulsorily be brought on the Trade Receivables e-Discounting System (TReDS).
• Joining this portal will enable entrepreneurs to access credit from banks, based on their upcoming receivables.
• This will resolve their problems of cash cycle.

Access to Markets:

• The public sector companies have now been asked to compulsorily procure 25 percent, instead of 20 percent of their total purchases, from MSMEs.
• Out of the 25 percent procurement mandated from MSMEs, 3 percent must now be reserved for women entrepreneurs.
• He said transactions worth more than Rs. 14,000 crore have been made so far through GeM (Govt. E Market).
• All public sector undertakings of the Union Government must now compulsorily be a part of GeM.

Technology Upgradation:

• PM announced establishment of tool rooms across the country as they are a vital part of product design.
• 20 hubs will be formed across the country, and 100 spokes in the form of tool rooms will be established.

Ease of Doing Business:

• Clusters will be formed of pharma MSMEs and 70 percent cost of establishing these clusters will be borne by the Union Government.
• The announcement focused on simplification of government procedures. The return under 8 labour laws and 10 Union regulations must now be filed only once a year.
• As part of establishing a unit, an entrepreneur needs two clearances namely to establish.
• The Environmental clearance and consent under air pollution and water pollution laws have been merged as a single consent and self-certifications.
• For minor violations under the Companies Act, the entrepreneur will no longer have to approach the Courts, but can correct them through simple procedures