- PM unveils 12 key initiatives
- 59 minute loan portal to enable easy access to credit for MSMEs
- Mandatory 25% procurement from MSMEs by CPSEs
- Ordinance for simplifying procedures for minor offences under Companies Act
Prime Minister Narendra Modi launched a historic support and outreach programme for the Micro, Small and Medium Enterprises (MSME) sector. As part of this programme, the Prime Minister unveiled 12 key initiatives which will help the growth, expansion and facilitation of MSMEs across the country.
The Prime Minister said that there are five key aspects for facilitating the MSME sector. These include access to credit, access to market, technology upgradation, ease of doing business, and a sense of security for employees. The 12 announcements address each of these five categories.
Access to Credit
- A 59 minute loan portal has been launched to 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. A link to this 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.
- A 2% interest subvention for all GST registered MSMEs, on fresh or incremental loans has been granted. For exporters who receive loans in the pre-shipment and post-shipment period, the interest rebate has been raised from 3% to 5%.
- 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 on their upcoming receivables. This will resolve their problems of cash cycle.
Access to Markets
- Public sector companies have now been asked to compulsorily procure 25%, instead of 20% of their total purchases, from MSMEs.
- The fifth announcement is related to women entrepreneurs. 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. Now all public sector undertakings of the Union Government must compulsorily be a part of GeM. And they should also get all their vendors registered on GeM.
- To give a push to technological upgradation in the MSME sector, 20 hubs will be formed across the country, and 100 spokes in the form of tool rooms will be established.
Ease of Doing Business
- Clusters will be formed of pharma MSMEs, 70% cost of establishing these clusters will be borne by the Union Government.
- Further simplifying government procedures, return under 8 labour laws and 10 Union regulations must now be filed only once a year.
- Establishments to be visited by an Inspector will be decided through a computerised random allotment.
- As part of establishing a unit, an entrepreneur needs two clearances namely, environmental clearance and consent to establish. Under air pollution and water pollution laws, now both these have been merged as a single consent. Return will be accepted through self-certification.
- 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
The Prime Minister also spoke of social security for the MSME sector employees. He said that a mission will be launched to ensure that they have Jan Dhan Accounts, provident fund and insurance.
The Prime Minister said the implementation of this outreach programme will be intensively monitored over the next 100 days.