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FM announces incentives for welfare of MSME sector
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Saurabh Gupta | 10 Jul, 2014
Finance Minister Arun Jaitley while presenting the first national budget for self and Prime Minister Narendra Modi's government Thursday expressed his concerns over welfare and economic development of micro, small and medium enterprises (MSMEs).
"Promotion of entrepreneurship and start-up Companies remains a challenge. While there have been some efforts to encourage, one principal limitation has been availability of start-up capital by way of equity to be brought in by the promoters. In order to create a conducive eco-system for the venture capital in the MSME sector it is proposed to establish a Rs 10,000 crore fund to act as a catalyst to attract private Capital by way of providing equity, quasi equity, soft loans and other risk capital for start-up companies," said Jaitley while presenting his debut budget for the financial year 2014-15 in New Delhi.
He also said a committee of the ministries of finance and micro, small and medium enterprises and the Reserve Bank of India will be set up to give concrete suggestions on the revival and the financial architecture of MSMEs.
Jaitley said the definition of MSME would be revised in terms of raising its capital ceiling. "The definition of MSME will be reviewed to provide for a higher capital ceiling. A programme to facilitate forward and backward linkages with multiple value chain of manufacturing and service delivery will also be put in place."
Other measures announced in the budget that have a bearing on the MSMEs are a provision of Rs.100 crore for Start-up Village entrepreneurship for the rural population, and Rs.200 crore for scheduled castes entrepreneurs.
On exit policy for SMEs he said, "Entrepreneur friendly legal bankruptcy framework will also be developed for SMEs to enable easy exit. A nationwide "District level Incubation and Accelerator Programme" would be taken up for incubation of new ideas and providing necessary support for accelerating entrepreneurship."
For the development of Textile sector, he said, "I propose to set up a Trade Facilitation Centre and a Crafts Museum with an outlay of Rs 50 crore to develop and promote handloom products and carry forward the rich tradition of handlooms of Varanasi, where I also intend to support a Textile mega-cluster."
Also proposes to set up six more Textile mega-clusters at Bareily, Lucknow, Surat, Kuttch, Bhagalpur, Mysore and one in Tamil Nadu. "I am allocating a sum of Rs.200 crore for this purpose," said FM.
He proposes to set up a Hastkala Academy for the preservation, revival, and documentation of the handloom/handicraft sector in PPP mode in Delhi. Rs.30 crore has been purposed for that.
FM also propose to start a Pashmina Promotion Programme and a programme for the development of other crafts of Jammu & Kashmir and Rs 50 crore have been allocated for this purpose.
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