Prime Minister Shri.Narendra Modi, very recently launched a pack of initiatives called Government's support and outreach initiative for Micro, Small and Medium Enterprises (MSMEs). This is considered to be one of the significant initiatives by Mr.Modi for the MSME Sector.
5 major areas were chosen by him, under which several initiatives were pronounced to help the MSME sector. Following are those 5 key areas.
1) Access to Credit
2) Access to Market
3) Technology Upgradation
4) Ease of Doing Business
5) Sense of Security for Employees
ACCESS TO CREDIT:
1. LOAN PROCUREMENT
Under this initiative, MSMEs can get upto Rs.1 crore as loan reducing the loan processing time from around 25 days to 59 minutes. This is something noteworthy because, usually a business loan of such kind takes a lot of time right from collecting proper documents from the borrower's side, till it gets the final approval from the bank. Even if you apply a loan from NBFCs, it said to take few more hours. Getting a loan in under 60 minutes from the Public Sector Banks is something which is going to happen for the first time.
The 59 Minute Loan can be obtained through the portal which is mentioned below
Here, the loan approval is given in-principle, without the requirement to submit physical documents and is granted in just 59 minutes from SIDBI and 5 Public Sector Banks (PSBs) like SBI, Bank of Baroda, PNB, Vijaya Bank and Indian Bank.
2. INTEREST SUBSIDY
If you are registered under MSME, and also have your GST registration done, your entity is eligible for this subsidy. Under this scheme, the government grants an Interest Subvention of about 2%. Please note that, this benefit is available for those who are registered under MSME and also Registered under GST. If you haven't already, it is a good idea to register for an Udyog Aadhar.
For MSME/ Udyog Aadhar Registration check out the following link
The interest subvention is more for exporters. Hence for exporters, who are in the Pre-shipment and Post-shipment stage, the interest subsidy has been increased from already existing 3% to 5%.
3. TRADE RECEIVABLE E-DISCOUNTING SYSTEM
Under this initiative, all MSMEs with a Turnover of more than Rs.500 crores will be compulsorily brought under the Trade Receivable e-Discounting System (TReDS). This system enables discounting of invoices of all MSME sellers which was raised against Big Corporates. Making use of this discounting system, will increase the cash flow of the entity and will ensure that the MSMEs working capital requirements remain intact.
ACCESS TO MARKETS
Now Entrepreneurs can have easier and improved access to Government Buyers. A mandate has been created for all Public Sector Enterprises. They are now required to mandatorily procure atleast 25% of their Total Purchases from MSMEs. Earlier it was only 20%, and now it has been increased to 25%.
5. BENEFITS FOR WOMEN ENTREPRENEURS
An added benefit to Women Entrepreneurs has been provided under this initiative. Out of the 25% purchases from MSMEs, it has now been mandated that 3% out of such 25% must be made from Women Entrepreneurs of MSMEs.
Under this announcement, Prime Minister Shri.Narendra Modi said that all Public Sector Units will now be part of GeM compulsorily and get their Vendors too registered under GeM.
GeM is the Government's e-Market place to procure Goods and Services online. After this announcement, it is estimated that the number of transactions taking place in GeM will increase manifold. It is also pertinent to note that more than 1.5 Lakh Suppliers have been registered in GeM so far and out of that 40,000 were MSMEs. To Learn more about GeM, check out the link below.
7. ESTABLISHMENT OF TOOL ROOMS
As we know already, PM Modi, is a great fan and avid user of Technology. Here under this initiative, the PM said that, a new set of Tool Rooms will be established across India which will be equipped with sophisticated machineries, with latest technology. Small Scale Industries can access these Tool Rooms to take full benefits of the latest technology to produce quality products, improve efficiency to stay ahead of the latest trend in the technology, which in turn helps them improve their business, by staying ahead of their competitors. For more information on Tool Rooms, check out this link.
EASE OF DOING BUSINESS IN INDIA
8. PHARMA CLUSTER
This initiative was mainly targeted towards the Pharma Sector. Under this initiative, Union government will bear 70% of the cost of establishing a Pharma Cluster which will be developed by Department of Pharmaceuticals, of Government of India.
9. FILING OF RETURNS
MSMEs will now have to file just returns just once a year under 8 Labor laws and 10 regulations making filing of returns more easier
10. MSME INSPECTION
Now, the MSME Inspections will be done based on the random allotment done by a computerized system. Thus unnecessary visits by the Inspectors to the the Factory will be greatly reduced by this initiative. These inspections made were mainly under environment and labor laws.
11. CLEARANCE CERTIFICATE
Now, it is enough, if an Entrepreneur gets one clearance for both Environment and Consent to Establish. Earlier they were required to get them separately, one for Environment and the other a Consent to Establish, now it has been made into one, thus reducing the time and effort taken.
12. VIOLATIONS UNDER COMPANY LAW
As the 12th and Final announcement, Prime Minister Shri.Narendra Modi said that minor violations under Company law can be corrected through simple procedures and does not necessitates approaching courts which was tiring and time consuming.
SOCIAL SECURITY FOR MSME EMPLOYEES
Finally, speaking about the social security for MSME Employees, the PM said that, it will be ensured that all MSME employees have PF accounts, covered by Insurance and have Jan Dhan Accounts.
For further assistance on availing benefits under the above mentioned initiatives email us at firstname.lastname@example.org