Credit support for MSMEs: Hailing the government support offered to MSMEs post Covid, Prime Minister Narendra Modi in his Independence Day address from the ramparts of the Red Fort noted that “During the Corona crisis, MSMEs were supported with nearly Rs 3.5 lakh crore, preventing them from sinking and providing them strength.”
After Covid struck in 2020, the government under its Atmanirbhar package had announced the Rs 3.5 lakh crore Emergency Credit Line Guarantee Scheme (ECLGS). The corpus for the scheme was later increased to Rs 5 lakh crore to extend benefits to MSMEs and other businesses across various sectors such as hospitality and aviation.
The scheme provided collateral-free loans to existing eligible borrowers with a 100 per cent guarantee in respect of the eligible amount as per the scheme guidelines. As per NCGTC, Rs 2.42 lakh crore guarantees benefitted 113.75 lakh MSMEs.
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Moreover, as per a research report in January this year by the State Bank of India on ECLGS, almost 14.6 lakh MSME accounts, of which about 98.3 per cent of the accounts were in the micro and small enterprises categories were saved from turning bad.
In terms of asset quality under ECLGS, the scheme recorded non-performing assets (NPAs) worth Rs 13,233 crore as of June 30, 2023. According to the data shared by Bhagwat Karad, Minister of State in the Finance Ministry in a written reply to a question in the Lok Sabha on July 24, the bad loans were 5.45 per cent of the total MSME loan amount of Rs 2.42 lakh crore guaranteed under ECLGS.
Meanwhile, PM Modi in his address also highlighted other initiatives such as Mudra scheme with an outlay of Rs 20 lakh crore, helping in providing opportunities for self-employment, businesses, and ventures for the youth of the country.
“About 8 crore people have started new businesses, and it’s not just 8 crore people who started their businesses; each entrepreneur has employed one or two individuals. The capability to employ 8-10 crore new individuals is achieved through the Mudra Yojana availed by 8 crore citizens,” PM Modi said in his address.
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The Prime Minister also highlighted the Vishwakarma Scheme which was announced in this year’s budget by Finance Minister Nirmala Sitharaman. PM Modi noted that the scheme will begin on Vishwakarma Jayanti (September 17) with an allocation of around Rs 13,000-15,000 crore.
“In the days to come, we will launch a scheme on the occasion of Vishwakarma Jayanti, benefiting individuals skilled in traditional craftsmanship, particularly from the OBC community. Weavers, goldsmiths, blacksmiths, laundry workers, barbers, and such families will be empowered through the Vishwakarma Yojana, which will begin with an allocation of around 13-15 thousand crore rupees,” PM Modi said.