Centre approves roadmap to energise MSME sector
The MSME sector has received special attention under the Atmanirbhar Bharat Abhiyaan for a self-reliant India
The centre on Monday announced two special packages for the Micro, Small and Medium Enterprises (MSMEs) - a Rs 20,000-crore package for distressed units and a Rs 50,000-crore equity infusion through a Fund of Funds.
The measures approved by the Cabinet Committee on Economic Affairs (CCEA) will benefit over 6 crore MSMEs.
Briefing the media, Union Minister Prakash Javadekar explained the modalities & road map for implementing the two major packages for the MSMEs.
The government will create a Fund of Funds with a total corpus of Rs. 50,000 crores to be used for equity infusion in high growth potential MSMEs. This is intended to help them grow and get listed on the stock exchange.
In addition to this, Rs. 20000 crore will be provided as subordinate debt through the Distressed Assets Fund to enable restructuring of stressed accounts of over 2 lakhs stressed MSMEs.
The CCEA also cleared a revision of capital and turnover limits for the MSME sector.
The definition of micro manufacturing and services unit was increased to Rs. 1 crore of investment and Rs. 5 crore of turnover. The limit in the case of small units was increased to Rs. 10 crore of investment and Rs 50 crore of turnover. In the case of medium units, this was increased to Rs 50 crore of investment and Rs. 250 crore of turnover.
The MSMEs form an integral part of the announcements made under the Atmanirbhar Bharat Abhiyaan by Prime Minister Narendra Modi .
Under this package, the MSME sector has not only been given a substantial allocation but has also been accorded priority in implementation of the measures to revive the economy. The key features of this package included:
Rupees Three lakh crore collateral-free automatic loans for MSMEs to meet operational liabilities, buy raw material and restart businesses.
Revision of MSME definition to render maximum benefits to the sector.
Disallowing global tenders in procurements uptoRs. 200 crores- to create more opportunities for domestic players.
And clearing of MSME dues by the Government and Public Sector Units within 45 days.
The government believes that these steps will help in attracting investments and creating more jobs in the MSME sector.
According to official figures, the MSMEs contribute 29 percent to India’s GDP. They contribute to almost half of exports from the country. Over 11 crore people are employed in the MSME sector.