Credit and Finance for MSMEs: The Emergency Credit Line Guarantee Scheme (ECLGS) launched during the Corona period to protect MSMEs from the crisis as evident from recent studies has given a fresh lease of life to 13 lakh 50 thousand MSME units and also secured 1 crore 50 lakh jobs, said President Ram Nath Kovind on Monday. In his address to the joint sitting of two houses of Parliament at the start of the Budget session, President said “along with large companies, our small and medium enterprises have a critical role in India’s prosperity. Our MSMEs have been the backbone of our economy, and a driver of Atmanirbhar Bharat. In order to protect MSMEs from crisis and ensure adequate availability of credit during the Corona period, the government started a scheme for guaranteed Collateral Free Loans of Rs 3 lakh crore.”
“It is evident from the recent studies that this scheme has given a fresh lease of life to 13 lakh 50 thousand MSME units and also secured 1 crore 50 lakh jobs. In June 2021, the government has enhanced credit guarantee from Rs 3 lakh crore to Rs 4.5 lakh crore,” President Kovind added.
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Highlighting policy decisions taken to expand the scope and opportunities for the MSME sector, President Kovind said the new definition of MSMEs is helping small industries to expand. He also noted that the government has also permitted wholesale and retail traders, as well as street vendors to get themselves registered on the Udyam portal so that they can avail benefits of Priority Sector Lending.
The government in June 2020 had approved the revision in the definition of MSMEs to further improve ease of doing business and extend benefits MSME benefits to more businesses. For micro-enterprises, the limit for investment and turnover was increased to Rs 1 crore and Rs 5 crore respectively. On the other hand for small enterprises, the investment and turnover limit was increased from Rs 1 crore and Rs 5 crore respectively to Rs 10 crore and Rs 50 crore. Similarly, for medium enterprises, the limit for investment was increased to Rs 50 crore and for turnover, the limit was increased to Rs 250 crore.
President Kovind also highlighted the success of Khadi. “Khadi, which was a symbol of the country’s consciousness during the freedom struggle under the leadership of Bapu, is once again becoming the mainstay of small entrepreneurs. With government’s efforts, sale of Khadi products has trebled in the country since 2014.”