SME Times News Bureau | 01 Jun, 2020
A special meeting of Cabinet Committee on Economic Affairs (CCEA) on
Monday approved the upward revision of MSME definition and modalities and road
map for laying down effective implementation mechanism for other two
announcements under the Atmanirbhar Bharat Package.
In the package announcement, the definition of micro manufacturing and
services unit was increased to Rs. 1 crore of investment and Rs. 5 crore of
turnover.
The limit of small unit was increased to Rs. 10 crore of investment and
Rs 50 crore of turnover. Similarly, the limit of a medium unit was increased to
Rs 20 crore of investment and Rs. 100 crore of turnover.
It may be noted that this revision was done after 14 years since the
MSME Development Act came into existence in 2006.
After the package announcement on 13th May, 2020, there were several
representations that the announced revision is still not in tune with market
and pricing conditions and it should be further revised upwards.
Keeping in mind these representations, it was decided to further
increase the limit for medium manufacturing and service units. Now it will be
Rs. 50 crore of investment and Rs. 250 crore of turnover.
It has also been decided that the turnover with respect to exports will
not be counted in the limits of turnover for any category of MSME units whether
micro, small or medium.
This is yet another step towards ease of doing business. This will help
in attracting investments and creating more jobs in the MSME sector.
Approval for provisioning of Rs
20,000 crore as subordinate debt to provide equity support to the stressed
MSMEs will benefit 2 lakh stressed MSMEs.
Approval for equity infusion of
Rs. 50,000 crore for MSMEs through Fund of Funds (FoF) will establish a framework
to help MSMEs in capacity augmentation. This will also provide an opportunity
to get listed in stock exchanges.
With the approval, implementation
Modalities and Road Map for entire components of the Atmnirbhar Bharat Abhiyan
package are in place. This will help in attracting investments and creating
more jobs in the MSME sector.
In the aftermath of COVID-19
pandemic, Prime Minister Shri Modi was quick to recognise the role of MSMEs in
building the Nation.
As such, MSMEs formed a very
prominent part of the announcements made under the Atmanirbhar Bharat Abhiyaan.
Under this package, the MSME sector has not only been given substantial
allocation but has also been accorded priority in implementation of the
measures to revive the economy. To provide immediate relief to MSME sector,
various announcements have been made under the Package.
Government of India has been
taking all necessary steps to ensure that the benefit of these landmark
decisions reaches to the MSMEs at the earliest. In this regard, following
necessary policy decisions have been already taken and the implementation
strategy has been put in place.
The scheme for
Rs. Three lakh crore col lateral-free automatic loans was earlier approved by
CCEA and has been formally launched.
Modalities have been worked out
for Upward revision of MSME Definition making it more inclusive broad-based
providing greater avenues to MSMEs to harness their potentials.
Similarly, amendments in General
Financial Rules mandating no global tenders for procurement upto 200 crore have
been carried out. The new rules have already been issued and effected. This
will open up new business avenues for Indian MSMEs.
To ensure that MSME payments are
released within the timeframe of 45 days, directions have been issued at the level
of Cabinet Secretary, Expenditure Secretary and Secretary, MSME.
To further ease the burden on
MSMEs, RBI has extended moratorium on repayment of loans for another three
months.
To manage all this, a robust ICT
based system called CHAMPIONS has also been launched by the Ministry of MSME.
The portal is not only helping and
handholding MSMEs in the present situation, but is also providing guidance to
grab the new business opportunities and in the long run, become national and
international Champions.
MSMEs are the backbone of Indian
economy. Silently operating in different areas across the country, more than 6
crore MSMEs have a crucial role to play in building a stronger and self-reliant
India.
These small economic engines have
a huge impact on the country's GDP-making a contribution of 29 percent. They
contribute to almost half of exports from the country. Additionally, more than
11 crore people are employed in the MSME sector.