As per the announcement made by Prime Minister Narendra Modi, a 59-minute loan facility of up to Rs 1 crore for small and medium businesses.
During the launch of MSME support programme, Prime Minister Modia said that the government has finalised 12 different policies those help to boost the sector. PM has also tagged it as a “Diwali gift”.
PM aforesaid, these policies would surely enhance credit access to small, medium and micro businesses. This move would also boost the small, medium and micro enterprises sector and will also help to generate the employment.
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PM Modi also stated that, “12 new historical decisions have been taken for the small industries which are like a Diwali gift for the sector.” The 59-minute loan facility is one of the key decisions.
The GST registered MSMEs will also get an interest of 2 percent on the incremental loa of up to Rs. 1 crore.
Interest subvention on pre- and post-shipment credit for exports by MSMEs has been increased from 3 per cent to 5 per cent, he added.
State-owned or public sector companies, which were mandated to source 20 per cent of their annual procurement from MSMEs, will now source at least a quarter of their requirement (25 per cent) from the sector, he said, adding 3 per cent of sourcing by PSUs would have to be done from MSMEs run by women.
All the central public sector enterprises must take membership of the Government e-Marketplace (GeM) to facilitate the online procurement of the common use goods and services by various government organisations and departments.
Modi has also announced Rs. 6000 crore for the creation of 20 hubs and 100 tool rooms for the technology upgradation.
All the companies having a turnover of more than Rs. 500 crore would noe come on Trade Receivables e-Discounting System (TReDS) platform so that there is no cash flow problem for MSMEs.
The outreach program would run for 100 days thereby covering 100 districts throughout India. The MSME sector even constitutes of vast network of more than 63 million units and also employs 111 million people thereby contributing nearly 30 per cent to the GDP.
A biggest obstacle for the growth of MSMEs is its inability of accessing the timely and the adequate finance as most of them are in the niche segments wherein the credit appraisal is the biggest challenge.
Nearly 97% of the MSMEs operate in the informal sector.