The government has earmarked around Rs 90 billion for the Micro Small and Medium Enterprises (MSME) outreach and support programme, which was announced by Prime Minister Narendra Modi on Friday.
For the interest subvention schemes, the government expects expenditure of Rs 27 billion, a senior finance ministry official said.
The PM had said that all goods and services tax (GST) registered small and medium companies will get a 2 per cent interest subvention on fresh or incremental loans valued up to Rs 10 million. For this scheme, the government has earmarked Rs 11 billion. For exporters, the interest rebate was increased from 3 per cent to 5 per cent for loans received during post- and pre-shipment period and the government expects an expenditure of about Rs 16 billion on this.
Further, Modi announced a Rs 60-billion package for creating 20 hubs and 100 tool rooms for technology upgrade for MSMEs.
Modi had on Friday announced a 12-point package for small and medium companies as a part of a 100-day outreach and support programme, aimed at giving them access to credit and increasing their cash flows, along with a liberal business environment. A ‘feedback and action room (FAR)’ has been created to facilitate GST helpdesks set up by Central Board of Indirect Taxes and Customs (CBIC) for MSMEs. The FAR will have dedicated officers who will record and process all grievances raised by these small and medium companies, along with providing solutions to it.
The government has appointed nodal officers, at the level of additional and joint secretaries, for each of the 80 MSME
cluster districts to be covered under the programme in various parts of the country. Along with them, industry associations, export promotion councils, senior bankers, central public sector units and various certification authorities will also be the part of the implementation team at the district-level.
Nine districts in Uttar Pradesh, seven in Maharashtra, six in Gujarat, five districts in Andhra Pradesh and Karnataka, four in Haryana are among those selected to be a part of the programme.
To extend its support further, the government has issued a notification directing all companies who get supply of goods or services from MSMEs to submit a half-yearly return to the Ministry of Corporate Affairs stating the reason for delay in payment to small and medium firms beyond 45 days. The companies have to specify the amount of payments due and the reasons for the delay.
Modi had said on Friday that delay in getting payment for supplying goods to big firms impact the cash flows and business of MSMEs.
Loans in 59 minutes
One of the key announcements by PM Modi on Friday was a countrywide launch of a web portal giving in-principle loans to MSMEs in 59 minutes from public sector banks. Here are some details:
Platform reduces loan processing turnaround time from 20-25 days to 59 minutes
After in-principle approval, lenders to conduct due diligence and the loan is expected to be disbursed in 7-8 working days
Loans are processed without human intervention till sanction or disbursement stage Loans in range of Rs 1 million - Rs 10 million are covered.
Collateral coverage not mandatory as platform linked to the Credit Guarantee Fund Scheme for MSMEs