The country’s economic base is dependent on the micro and medium enterprises which provide jobs to crores of people. These MSMEs are like the backbone of the country on which lakhs of unskilled workers depend on.
But since decades, the MSME sector has far been neglected and the government had not taken much efforts to help uphold the interest of the MSME sector. But after Modi government took over in 2014, considerable efforts are being put to revive the sector and provide financial benefits to them. With the same intention the MUDRA scheme was launched which has now provided financial assistance to over 8 crore people.
PM Modi who has always stressed on Start Up India to encourage more people take up entrepreneurship had initiated many programs to help youngsters get easy loans without providing collateral security. Now, PM Modi as a Diwali gift has taken up one more massive initiate to sanction loans upto 1 crore in 59 minutes.
PM Modi who was addressing the MSME sector on Friday gave a pleasant surprise by launching a portal in which MSMEs can get crore upto 1 crore in just 59 minutes At times when MSMEs are struggling to raise funds, the governmet’s massive initiate will become a boon to the industry.
PM in his address said, “In the time taken for you to reach your office, you can now get a loan. We had run a pilot and I had set a target of 72,000 MSMEs under this. As of today 72,680 have been on boarded.”
The Prime Minister added that loan option for GST registered firms will now be available through the GST portal itself. “When you file GST returns, you will be asked if you want a loan. GST registered firms will also get a 2 % rebate on interest rates. Being a part of the GST and being an honest taxpayer will become your strength,” said Modi. For exporters seeking loans on pre-shipment and post shipment, the rebate has been increased from 3% to 5%.” Economic Times
The government will also ease procedures for MSMEs to do business. Modi said that small businesses will now only have to file one return annually under eight labour laws. He said inspection will be technology-based and the report will be submitted on the portal within 48 hours.
The prime minister unveiled 12 initiatives for MSMEs, which he called “Diwali gifts”…
- Loans for MSMEs up to Rs 1 crore can be granted in 59 minutes, which can also be availed through goods and services tax portal.
- A 2 percent interest subvention will be given on incremental and new loans to GST-registered MSMEs. For exporters who receive loans in pre- and post-shipment period, an increase in interest rebate has been given from 3-5 percent.
- All public-sector companies and corporates with turnover exceeding Rs 500 crore will have to mandatorily register on Trade Receivables Electronic Discounting System portal. This will improve the cash cycle for MSMEs as it will enable entrepreneurs to access credit from banks, based on their upcoming receivables.
- Public-sector undertakings will have to buy their 25 percent of their inputs from MSMEs from 20 percent earlier.
- Of the 25 percent, 3 percent of procurement will have to done by women entrepreneurs or women-led MSMEs.
- All central public sector enterprises will have to come on board of Government e-Marketplace so that they can procure goods from MSMEs listed on the portal.
- Technology upgradation support will be given to MSMEs. About 20 technological centres will be made as hubs and 100 centres as tool rooms will be created at the cost of Rs 6,000 crore.
- Clusters will be created for pharma MSME companies so that they can reach customers directly. About 70 percent of the cost for creating these clusters will be borne by the central government.
- MSMEs will have to file only one return under eight labour laws and 10 central rules against two returns earlier.
- Inspection would be done based on computerised random allotment and report of inspection will have to be submitted within 48 hours on the reporting portal. This will free MSMEs from Inspector Raj (regime), Modi said.
- Process of environmental clearance has been simplified, and MSME will require only one approval for “environmental clearance” and “consent to establish” under Air and Water Act.
- Ordinance has been approved for simplifying levy of penalty for minor offences under Companies Act. This will avoid unnecessary harassment to small business owners, and they won’t have to approach courts, but can correct minor violations through simple procedures.