Monetary Policies || Government Growth Booster for MSMEs

Small & medium Enterprises are the back bone of Industrial Development. Ministry of Micro Small & Medium Enterprises Contributes Nearly 8% in GDP, 40% in Manufacturing output & 45% in Exports. They have emerged as a dynamic and vibrant sector of economy. They are widely dispersed across the country and produces a diverse range of product and service. It helps in the growth of a country. They are the nursery for entrepreneurship and innovation.

Over the last few weeks, the government has been focusing continuously on empowering MSMEs, and has announced a series of steps to help and nurture MSMEs. The Cabinet on 01.06.2020 approved the measures taken by Ministry of Finance.

The cabinet has come up with the new classification of MSMEs which is mentioned as below:

Classification Micro Small Medium*
Manufacturing (Existing) Investment< ₹ 25 lakhs Investment<₹ 5 crore Investment< ₹ 10 crore
Services Enterprise (Existing) Investment< ₹ 10 lakhs Investment< ₹ 2 crore Investment< ₹ 5 crore
Manufacturing &Services (Revised) Investment< ₹ 1 crore &
Turnover < ₹ 5 crore
Investment< ₹ 10 crore &
Turnover < ₹ 50 crore
Investment< ₹ 50 crore &
Turnover < ₹ 250 crore

*New limit approved by Cabinet on 01.06.2020

Moreover, Hon’ble Prime Minister has launched a new platform called “CHAMPIONS” on 01.06.2020 which stands for Creation and Harmonious Application of Modern Processes for Increasing the Output and National Strength (accessible at https://champions.gov.in) which is a combined platform for handholding grievance redressal, harnessing entrepreneurial talent and discovering new business opportunities for MSMEs.

Major Schemes laid by Finance Ministry to expand MSMEs in INDIA under “Atmanirbhar Bharat Abhiyan”

·  No guarantee and collateral free automatic loans for MSMEs units having outstanding credit up to Rs. 25 crore and turnover below Rs. 100 crores.

·  The government will infuse equity of ₹ 50,000 crore for MSMEs through Fund of Funds.

·  Provisioning of ₹ 20,000 crore as subordinate debt to provide equity support to the stressed MSMEs.

·  E-market linkage for MSMEs to be promoted to act as a replacement for trade fairs and exhibitions. This would be a platform for MSMEs to make their product global and increase their market size and share.

·  Global tender has been disallowed for Government procurement tenders up to ₹ 200 Crore. Due to this competition from foreign companies will get eliminated and MSMEs will have more chances to get government tenders.

 

Other Benefits available to registered MSME

·  Easy to get licenses, approvals and registration from Government.

·  Concession in Electricity bills.

·   Registered MSME enterprises can claim the reimbursement of the expenses that were spent for the ISO certification Excise exemption scheme.

·   1% Exemption on interest rate on Overdraft.

·   Reduction in rate of interest from banks.

·  50% Subsidy for Patent Registration and DPIIT Registration Fees.

·  Protection against delayed payment in form of interest beyond 45 days.

·  Enterprises registered under MSME are also eligible for a subsidy for Industrial Promotion as suggested by the Government.

Registration Process and details required for registration

·  To do the registration the small and medium scale industry owner has to fill a simple form which he can do online (accessible at https://udyogaadhaar.gov.in) as well as offline for which no fees is applicable.

·  Basic details and KYC documents are required for registration like Name, Address, PAN Card, Certificate of Incorporation of enterprise.

·  Apart from the above, additional details about business like main business activity, location of Plant and Number of employees are also required.