MSME Benefits under Aatma Nibhar Bharat Package

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.

• 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.