CA Rahul Mittal
MSME stands for Micro, Small and Medium Enterprises. In a developing country like India, MSME industries are the backbone of the economy.
Objective of ATMA- NIRBHAR BHARAT ABHIYAN
- Interim measures such as liquidity infusion and direct cash transfers for the poor.
- long-term reforms in growth-critical sectors to make them globally competitive and attractive.
Decisions taken by Govt. for the growth of MSME Sector under the ATMA- NIRBHAR BHARAT ABHIYAN
1. Collateral Free Loans
- Rs. 3 Lakh crores to collateral free automatic loans for businesses, including MSMEs
- This scheme is implemented by Department of Financial Services.
- Borrowers with upto Rs. 25 Cr. Outstanding and Rs. 100 Cr. Turnover eligible.
- Loans to have 4 year tenor.
- 12 months moratorium on principal repayment.
- Interest to be capped.
- Interest rate 9.25% to 9.75% from banks
- Interest rate 14% from NBFCs.
- 100% credit guarantee cover to banks and NBFCs on principal.
- Scheme can be availed till 31st Oct, 2020.
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All businesses/MSMEs are eligible
How to Apply?
- Through Banks, DFS and National Credit Guarantee Trustee Company Ltd (NCGTC)
2. Debt for Stressed MSMEs
- Rs. 20,000 crores subordinate Debt for stressed MSMEs
- Functioning MSMEs which are NPA or are stressed will be eligible
- Govt will provide a support of Rs. 4000 crore to CGTMSE
- CGTMSE will provide partial credit Guarantee support to Banks
- Promoters of the MSME will be given debt by banks, which will then be infused by promoter as equity in the unit.
3. Equity Infusion For MSMEs
- Rs. 50,000 crores equity infusion for MSMEs through Fund of Funds
- Will provide equity funding for MSMEs with growth potential and viability
- Funds of fund will be operated through a Mother Fund and few daughter funds
- Will help to expand MSME size & capacity , encourage MSMEs to get listed on main board of Stock Exchanges.
How to Apply?
- Through investor funds on boarded and registered with proposed Fund of funds
4. New Definition of MSMEs
- Distinction between manufacturing and service sector to be eliminated
- Composite criteria: Annual Turnover and Investment for manufacturing & service sector
- Micro: Investment < Rs. 1 cr. and Turnover < Rs. 5 cr.
- Small: Investment < Rs. 10 cr. and Turnover < Rs. 50 cr.
- Medium: Investment < Rs. 50 cr. and Turnover < Rs. 250 cr.
5. Global Tenders to be disallowed upto Rs. 200 cr.
- Global Tenders will be disallowed in government procurement tenders upto Rs. 200 cr.
- This will be a step towards self-Reliant India and support Make In India.
- This will help MSMEs to increase their business.
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