Ahead of Diwali and Lok Sabha Elections, PM Narendra Modi is focusing on the sensitive small business sector and has announced a total of a dozen decisions that will benefit the MSME sector; one of the decisions includes a promise to grant instant business loan worth Rs 1 crore within a timeframe of just 59 minutes.
After demonetisation, the small and medium sector businesses are supposedly the worst hit components of Indian economy. Focusing on repairing the MSME sector, PM Narendra Modi recently announced 12 new decisions that will help small businesses to get financial support. While on one hand, the RBI is implementing non-relaxing rules, the Centre has announced a 12-point ‘Support and Outreach Initiative’ for micro, small and medium sized businesses in India – that are dubbed as “Modi’s Diwali gift for the MSMEs”.
The 12 key decisions announced today include schemes like: 59-minutes loans under which, the government promises to grant all GST-registered MSMEs with Rs 1 crore loan within just 59 minutes via a dedicated portal. All registered MSME will also receive a 2% rebate on incremental new loans of up to Rs 1 crore and interests on pre- and post-shipment credit for exports has been increased from 3 to 5%. Besides this, Rs 6,000 crore package has been announced to provide technological support to small underdeveloped businesses.
Also, all companies with turnover exceeding Rs 500 crore will be required to join the Trade Receivables e- Discounting System (TReDS) so actual MSMEs can have easier cash flows. Other than that, public sector companies, which were mandated to source 20% of their annual procurement from MSMEs, will now source at least a quarter of their requirement (25%) from the sector; and of this, 3% must now be reserved for women entrepreneurs. Besides these, there are a lot of other changes showing a shift in government’s approach for revival of the MSME sector in India.