PM unveiles 12 initiatives unveiled for MSMEs
Credit: MSMEs get 59-minute loan portal
Credit: MSMEs get 59-minute loan portal
The Prime Minister Narendra Modi has unveiled 12 key initiatives, including a loan portal to enable in 59 minutes easy access to credit for Micro, Small and Medium Enterprises (MSMEs).
Launching the programme on 2 Nov 2018 in Delhi, he extended a historic support and outreach programme for the MSME sector.
The initiatives will help the growth, expansion and facilitation of MSMEs across the country.
The Prime Minister said that the 12 decisions will mark a new chapter for the MSME sector.
Noting that MSMEs are one of the principal employment generators in India, the Prime Minister recalled the glorious Indian traditions of small scale industry, including Ludhiana’s hosiery, and Varanasi’s sarees.
Modi said that the success of economic reforms launched by the Union Government, can be gauged from the rise in India’s “Ease of Doing Business Rankings,” from 142 to 77.
He highlighted five key aspects for facilitating the MSME sector. These include access to credit, access to market, technology upgrade, ease of doing business, and a sense of security for employees.
He said that as a Diwali gift for the sector, the 12 announcements he is making, will address each of these five categories.
Access to Credit
First: the 59 minute loan portal will enable easy access to credit for MSMEs. Loans upto Rs.1 crore can be granted in-principle approval through this portal, in just 59 minutes.
The portal will be made available through the GST portal.
The Prime Minister asserted that in New India, no one should be compelled to visit a bank branch repeatedly.
Second: a 2% interest subvention for all GST registered MSMEs, on fresh or incremental loans. For exporters who receive loans in the pre-shipment and post-shipment period, the Prime Minister announced an increase in interest rebate from 3% to 5%.
Third: 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 ontheir upcoming receivables. This will resolve their problems of cash cycle.
Access to Markets
Fourth: public sector companies have now been asked to compulsorily procure 25%, instead of 20% of their total purchases from MSMEs.
Fifth: out of the 25% procurement mandated from MSMEs, 3% must now be reserved for women entrepreneurs.
More than 1.5 lakh suppliers have now registered with GeM, out of which 40,000 are MSMEs. Transactions worth more than Rs.14,000 crore have been made so far through GeM.
Sixth: all public sector undertakings of the Union Government must now compulsorily be a part of GeM and should also get all their vendors registered on GeM.
Seventh: the Prime Minister said that tool rooms across the country are a vital part of product design. Twenty hubs will be formed across the country, and 100 spokes in the form of tool rooms will be established.
Ease of Doing Business
Eighth: clusters will be formed of pharma MSMEs with 70% cost of establishing these clusters will be borne by the Union Government.
Ninth: simplification of government procedures – that the return under 8 labour laws and 10 Union regulations must now be filed only once a year.
Tenth: the establishments to be visited by an Inspector will be decided through a computerised random allotment.
Eleventh: as part of establishing a unit, an entrepreneur needs two clearances namely, environmental clearance and consent to establish. Both air pollution and water pollution laws have been merged as a single consent. The return will be accepted through self-certification.
Twelfth: an Ordinance has been brought, under which, for minor violations under the Companies Act, the entrepreneur will no longer have to approach the Courts, but can correct them through simple procedures.
Social Security for MSME Sector Employees
A mission will be launched to ensure that MSME employees have Jan Dhan Accounts, provident fund and insurance.
The Prime Minister said that these decisions would go a long way in strengthening the MSME sector in India.
He said the implementation of this outreach programme will be intensively monitored over the next 100 days. fiinews.com