Credit and Finance for MSMEs: To help out stressed MSMEs in dire times, the government will also take burden of Rs 20,000 crore subordinate debt, benefiting 2 lakh such businesses.
Credit and Finance for MSMEs: As the government looks to strengthen India’s economy, Finance Minister Nirmala Sitharaman announced Rs 3 lakh crore collateral free automatic loan for businesses, including MSMEs. The move intends to benefit 45 lakh small businesses, she said while shining light on the Prime Minister Narendra Modi’s Rs 20 lakh crore economic package. The loan will have a tenure of four years along with a 12 month moratorium, she added. To help out stressed MSMEs in dire times, the government will also take burden of Rs 20,000 crore subordinate debt, benefitting 2 lakh such businesses. The government will also create a fund of funds for MSME which is expected to infuse Rs 50,000 crore equity in MSMEs with growth potentials.
Among other major announcements, the BJP government has also altered the definition of MSME. With the latest changes, those units which have invested up to Rs 1 crore will now be called micro units as opposed to the earlier limit of Rs 25 lakh. Those units which have a turnover of up to Rs 5 crore will now be called micro units, FM Sitharaman said, adding that a turnover based criteria is being introduced to define small scale businesses. The government has also changed the investment and turnover limits for small and medium businesses likewise as well. This will help them retain fiscal and other benefits, FM Sitharaman said. Moreover, the government has now banned global tenders for government procurement up to Rs 200 crore. The move will help MSMEs to compete and supply in government tenders.
Prime Minister Narendra Modi led BJP government had yesterday announced Rs 20 lakh crore economic relief plan to help the country tide over the coronavirus crisis. PM Modi had then said that the plan will help India’s cottage industries, home industries, farmers, industries and MSMEs.