{"id":22291,"date":"2020-12-18T13:00:35","date_gmt":"2020-12-18T07:30:35","guid":{"rendered":"https:\/\/corpbiz.io\/learning\/?p=22291"},"modified":"2020-12-18T13:00:36","modified_gmt":"2020-12-18T07:30:36","slug":"policy-measures-that-can-uplift-the-msmes-sector-in-india","status":"publish","type":"post","link":"https:\/\/corpbiz.io\/learning\/policy-measures-that-can-uplift-the-msmes-sector-in-india\/","title":{"rendered":"An Overview on Policy Measures That Can Uplift the MSMEs Sector in India"},"content":{"rendered":"\n<p class=\"has-drop-cap\">Enterprises have been taking a strike due to Covid-19 National lockdown.\nThe supply chain has been rattled, imports are falling, and markets are argumentative.\nThe MSMEs sector has perhaps been the hardest hit.<\/p>\n\n\n\n<p>Business activities involved in the manufacturing will also take a hit on\nthe export business activities as the condition remains uncertain. The MSMEs\nservice sector is also slowing down with more people choosing social distance.<\/p>\n\n\n\n<p>To evaluate the Indian economy among\u00a0<strong>Covid-19<\/strong>\u00a0pandemic, the government has announced several advantageous schemes and policies for the MSMEs sector, which may help to escalate the businesses of MSMEs determination of <strong>\u201c<\/strong><em><strong>Aatmanirbhar Bharat<\/strong><\/em><sup><a href=\"https:\/\/en.wikipedia.org\/wiki\/Atmanirbhar_Bharat\"><strong>[1]<\/strong><\/a><\/sup><strong>\u201d.<\/strong><\/p>\n\n\n\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_82_2 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title ez-toc-toggle\" style=\"cursor:pointer\">Page Contents<\/p>\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" aria-label=\"Toggle Table of Content\"><span class=\"ez-toc-js-icon-con\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/span><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 eztoc-toggle-hide-by-default' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/corpbiz.io\/learning\/policy-measures-that-can-uplift-the-msmes-sector-in-india\/#Crisis_Faced_By_MSMEs_Sector\" >Crisis Faced By MSMEs Sector<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/corpbiz.io\/learning\/policy-measures-that-can-uplift-the-msmes-sector-in-india\/#MSMEs_Revised_Definition\" >MSMEs Revised\nDefinition<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/corpbiz.io\/learning\/policy-measures-that-can-uplift-the-msmes-sector-in-india\/#How_Can_The_Government_Provide_Aid_To_MSMEs_Sector\" >How Can The Government Provide Aid To MSMEs Sector?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/corpbiz.io\/learning\/policy-measures-that-can-uplift-the-msmes-sector-in-india\/#Government_Initiatives_to_Promote_Newly_MSMEs\" >Government Initiatives to\nPromote Newly MSMEs<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/corpbiz.io\/learning\/policy-measures-that-can-uplift-the-msmes-sector-in-india\/#Who_Sanctions_MSMESME_Loans\" >Who Sanctions MSME\/SME Loans?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/corpbiz.io\/learning\/policy-measures-that-can-uplift-the-msmes-sector-in-india\/#Certain_Measures_Taken_By_Government_towards_Aatmnirbhar_Bharat\" >Certain Measures Taken By\nGovernment towards Aatmnirbhar Bharat<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/corpbiz.io\/learning\/policy-measures-that-can-uplift-the-msmes-sector-in-india\/#Conclusion\" >Conclusion<\/a><\/li><\/ul><\/nav><\/div>\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Crisis_Faced_By_MSMEs_Sector\"><\/span>Crisis Faced By MSMEs Sector<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>As per the recent survey report submitted by some legit sources, 26% of\nenterprises surveyed stated that sales and purchase had been affected due to the\npandemic situation of Covid-19; the MSMEs sector is facing a crisis like low\nliquidity or cash flow and lack of workforce daily.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"MSMEs_Revised_Definition\"><\/span>MSMEs Revised\nDefinition<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>To MSMEs sector fear of lacking in size to sustain the government&#8217;s\nbenefits to enterprises classified according to the current MSMEs definition,\nNirmala Sitharaman Indian Finance Minister amended the MSMEs definition. Under\nthe new definition, manufacturing and service MSMEs will be outlined under a\ncommon measure that will mix investment in plants and machinery or equipment\nand turnover.<\/p>\n\n\n\n<p>&nbsp;&#8220;The proposed definitional\nchange for the MSME sector based on turnover is enlightened and perfectly\ncoordinated with the GSTN framework.&#8221;<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">Revised MSMEs\nSector Classification<\/h3>\n\n\n\n<table class=\"table table-bordered\">\n<tbody>\n<tr>\n<td colspan=\"4\" width=\"100%\">\n<p style=\"text-align: center;\"><strong>Composite Criteria: Investment and Annual Turnover<\/strong><\/p>\n<\/td>\n<\/tr>\n<tr>\n<td width=\"20%\">\n<p><strong>Classification<\/strong><\/p>\n<\/td>\n<td width=\"25%\">\n<p><strong>Micro<\/strong><\/p>\n<\/td>\n<td width=\"28%\">\n<p><strong>Small<\/strong><\/p>\n<\/td>\n<td width=\"26%\">\n<p><strong>Medium<\/strong><\/p>\n<\/td>\n<\/tr>\n<tr>\n<td width=\"20%\">\n<p>Manufacturing<br \/> &amp; Services<\/p>\n<\/td>\n<td width=\"25%\">\n<p>Investment &lt; Rs. 1 cr.<br \/> and<br \/> Turnover &lt; Rs.5 cr.<\/p>\n<\/td>\n<td width=\"28%\">\n<p>Investment&lt; Rs. 10 cr.<br \/> and<br \/> Turnover &lt; Rs.50 cr.<\/p>\n<\/td>\n<td width=\"26%\">\n<p>Investment &lt; Rs. 50 cr.<br \/> and<br \/> Turnover &lt; Rs.250 cr.<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"How_Can_The_Government_Provide_Aid_To_MSMEs_Sector\"><\/span>How Can The Government Provide Aid To MSMEs Sector?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>The government has commenced taking some moves to conduct the MSME sector, a drift. The Reserve Bank of India recently brought Long Term Repo Operations (LTRO) net amount of INR 100,000 crore to help banks increase lending at cheaper interest rates. The Finance Minister Nirmala\u00a0 Sitharaman has released the 6 relief measures to provide aid to the MSMEs sector.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Government_Initiatives_to_Promote_Newly_MSMEs\"><\/span>Government Initiatives to\nPromote Newly MSMEs<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>The below discussed are the initiatives taken by the government to promote newly MSMEs<\/p>\n\n\n\n<div class=\"wp-block-image\"><figure class=\"aligncenter\"><img decoding=\"async\" width=\"855\" height=\"633\" src=\"https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2020\/12\/Government-Initiatives-to-Promote-Newly-MSMEs.png\" alt=\"Government Initiatives to Promote Newly MSMEs\" class=\"wp-image-22293\" srcset=\"https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2020\/12\/Government-Initiatives-to-Promote-Newly-MSMEs.png 855w, https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2020\/12\/Government-Initiatives-to-Promote-Newly-MSMEs-300x222.png 300w, https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2020\/12\/Government-Initiatives-to-Promote-Newly-MSMEs-768x569.png 768w\" sizes=\"(max-width: 855px) 100vw, 855px\" \/><\/figure><\/div>\n\n\n\n<h3 class=\"wp-block-heading\">CHAMPION\u2019s Portal: Creation and\nHarmonious Application of Modern Processes for Increasing the Output and\nNational Strength<\/h3>\n\n\n\n<p>It has been perceived essential to develop a consolidated, authorized,\nprosperous, bundled, and technology campaign platform for aiding and building\nup the Micro, Small, and Medium Enterprises (MSMEs) of the country. As the name\nsuggests, it will intend at Creation and Harmonious Application of Modern\nProcesses for Increasing the Output and National Strength. This is\nfundamentally formed to make the smaller units big by aiding constraining.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\">Basic Objectives of\nthe CHAMPIONS Portal<\/h4>\n\n\n\n<ul><li>To provide the help MSMEs sector in their difficult time such as financial help, raw materials, labour, etc. <\/li><li>To provide aid to the MSMEs sector capture new chances engaging production of medical items &amp; accessories.<\/li><li>To provide aid to MSMEs sector in recognizing sparks<\/li><li>It is a one stop resolution for everything in regarding MSME initiating from <a href=\"https:\/\/corpbiz.io\/msme-registration\"><strong>MSME registration<\/strong><\/a> to obtaining resources, taking guidance, providing suggestions and incorporating grievances.<\/li><li>MSME Samadhan<\/li><li>MSME Sambandh<\/li><li>MSME Sampark<\/li><li>Entrepreneurship and Skill Development programs<\/li><li>MSME Databank<\/li><li>PMEGP e-portal<\/li><li>Infrastructure Development programs<\/li><\/ul>\n\n\n\n<h3 class=\"wp-block-heading\">Prime Minister\nEmployment Generation Programme (PMEGP)<\/h3>\n\n\n\n<ul><li><strong><em>&nbsp;CGTMSE (Credit Guarantee Fund Trust for Micro\nand Small Enterprises) &nbsp;<\/em><\/strong>was\ninitiated by the Government of India to generate collateral free credit for\nMSMEs sector.<\/li><\/ul>\n\n\n\n<p>Interest Subvention Scheme is for\nfarmers of the nation. It aims to give short term credit at subsidies interest\nrate.<\/p>\n\n\n\n<ul><li><strong><em>Credit Linked Capital Subsidy Scheme<\/em><\/strong>\nfor technology up gradation is a revised policy. It aims to expediting by\ngiving technology up gradation 15% up front capital subsidy to MSMEs sector.<\/li><li><strong><em>Gram Udyog Vikas Yojna<\/em><\/strong> (PMEGP) is a\nself-employment scheme of the Central Government. Under PMEGP, there is a loan\nof amount of Rs 25 lakh for establishing industries and Rs 10 lakh for investing\nin the services sector.&nbsp; If the\nentrepreneurs set up industries in rural areas, then this amount of subsidy\nincreases to 25 to 35 percent.<\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Who_Sanctions_MSMESME_Loans\"><\/span>Who Sanctions MSME\/SME Loans?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Companies incorporated under MSME can avail loans are as follows:<\/p>\n\n\n\n<ul><li>Small Industries Development Bank of India\n(SIDBI)<\/li><li>National Small Industries Corporation (NSIC)<\/li><li>Regional Rural Banks (RRBs)<\/li><li>Scheduled Commercial Banks (SCBs)<\/li><li>North Eastern Development Finance Corporation\n(NEDFi)<\/li><li>Other banks and NBFCs<\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Certain_Measures_Taken_By_Government_towards_Aatmnirbhar_Bharat\"><\/span>Certain Measures Taken By\nGovernment towards Aatmnirbhar Bharat<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>The below discussed are the government&#8217;s certain measures to help the MSMEs\nsector in Covid 19 pandemic situation.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">INR\n3 lakh crores Collateral Free Automatic Loans for MSMEs Sector<\/h3>\n\n\n\n<ul><li>Debtor with amount of INR. 25 crore unpaid debt and\namount of INR. 100 crore turnover are worth to use such loan<\/li><li>Loans which have 4 years tenure with halt of 12\nmonths on principal paying back.<\/li><li>Interest rate to be eclipsed.<\/li><li>100% credit guarantee including to Banks and\nNBFCs on principal amount and interest rate.<\/li><li>The aforesaid Scheme can be used till the date 31<sup>st<\/sup>&nbsp;October,\n2020 &#8211; but was consequently extended by a month\nand was supposed to drift on November 30<\/li><li>There will be no need to pay guarantee fee.<\/li><li>No fresh collateral<\/li><\/ul>\n\n\n\n<h3 class=\"wp-block-heading\">Rs. 20,000 crores Subordinate Credit for MSMEs<\/h3>\n\n\n\n<ul><li>Operating MSMEs which are NPA or are emphasized\nwill be worthy.<\/li><li>Advertiser of MSME will be provided credit by banks,\nwhich will then be impregnated by advertiser as equity in the unit.<\/li><li>Government will give a support of amount of Rs.\n4000 crores.<\/li><li>CGTMSE will give half debt guarantee uphold to\nthe financial institution. <\/li><\/ul>\n\n\n\n<h3 class=\"wp-block-heading\">Rs. 50,000 crores Amount Invested in Possession\nImpregnated through MSME funds of fund<\/h3>\n\n\n\n<ul><li>FOF with the amount of INR. 10,000 crores will\nbe set up<\/li><li>Give money invested in possession for MSMEs with\ndevelopment and potential activities.<\/li><li>FoF will be conducted &nbsp;through Mother fund and some Daughter funds<\/li><li>It will provide&nbsp;\nhelp to increase MSME size as well as capacity<\/li><li>It will&nbsp;\nencourage MSMEs to get recorded on main board of Stock exchanges<\/li><\/ul>\n\n\n\n<h3 class=\"wp-block-heading\">Rs. 45,000 crores Partial Debt Guarantee Scheme 2.0\nfor NBFCs<\/h3>\n\n\n\n<ul><li>NBFCs \/ HFCs \/ MFIs with low debt&nbsp; rating need convert to sanction fresh loan to\nMSMEs and individuals<\/li><li>Enduring PCGS policy&nbsp; to be increased to enclose financing such as\nprimary issuance of bonds \/ CPs of such entities<\/li><li>First 20% of loss will be carried &nbsp;by the bondsman <\/li><li>AA paper and below engaging&nbsp; unrated paper will be allowed for investment<\/li><\/ul>\n\n\n\n<h3 class=\"wp-block-heading\">Revision of MSME <\/h3>\n\n\n\n<ul><li>The investment limit to be amended skyward.<\/li><li>Additional criteria of turnover being announced<\/li><li>Distinguish between manufacturing and service\nsector to be removed.<\/li><\/ul>\n\n\n\n<h3 class=\"wp-block-heading\">Global tenders to be disallowed for limit upto\nRs. 200 crores<\/h3>\n\n\n\n<ul><li>Indian MSMEs and other Companies have\nencountered with the biased competition from foreign establishments. Due to\nwhich, the &nbsp;global tenders will not be\nallowed&nbsp; in government obtainment tenders\nup to the amount of&nbsp; INR 200 crores<\/li><li>It will help MSMEs to increase their business<\/li><li>It will be a move towards&nbsp;<strong>self-reliant\nIndia<\/strong>&nbsp;and support&nbsp;<strong>Make in India<\/strong><\/li><\/ul>\n\n\n\n<h3 class=\"wp-block-heading\">Other Measures<\/h3>\n\n\n\n<ul><li>E-market in relation to MSMEs to be advertised\nto act as a replacement for trade fairs and exhibitions<\/li><li>Fintech will be availed to increase the &nbsp;transaction based oon lending using data made by\nthe e-marketplace<\/li><li>MSME debt from Government and Central Public\nSector endeavoring (CPSEs) to be publicized within the &nbsp;45 days<\/li><li>30,000 crores special liquidity schemes for\nNBFCs \/ HFCs \/ MFIs<\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Conclusion\"><\/span>Conclusion<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Being an agile developing economy, the government should spread more alertness about the MSMEs sector and target achieving more employment, enhancing industrialization, curtailing in imports, expanding export, modernizing the technology, ambitious business activities, knowledge development wealth creation, and economic development. Incorporating and using the advantages &amp; policies under MSMEs will aid in attaining the development and economies of scale of the nation.<\/p>\n\n\n\n<p class=\"text-left\"><b>Read our article<\/b>:<mark style=\"background: #fffd03 !important;\"><a href=\"https:\/\/corpbiz.io\/learning\/eclg-scheme-to-attract-more-borrowers-under-msme\/\">\nGovernment Announced Extension of ECLG Scheme to Attract More Borrowers under MSME\n<\/a><\/mark><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Enterprises have been taking a strike due to Covid-19 National lockdown. The supply chain has been rattled, imports are falling, and markets are argumentative. The MSMEs sector has perhaps been the hardest hit. Business activities involved in the manufacturing will also take a hit on the export business activities as the condition remains uncertain. The [&hellip;]<\/p>\n","protected":false},"author":32,"featured_media":22297,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[176],"tags":[1336],"acf":{"service_id":"71"},"authorName":"Komal Singh","authorImageUrl":"https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2020\/12\/processed.jpeg","authorDescription":"Komal Singh is a Legal scholar, having diverse experience in scripting research papers, articles &amp; dissertations, which serves her main interest &amp; competent in drafting legal documents. She has polished her skills in dealing with the matter related to consumer affairs and now building intelligible Legal Content for Corpbiz.","postViews":4127,"readingTime":5,"_links":{"self":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts\/22291"}],"collection":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/users\/32"}],"replies":[{"embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/comments?post=22291"}],"version-history":[{"count":7,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts\/22291\/revisions"}],"predecessor-version":[{"id":22300,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts\/22291\/revisions\/22300"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/media\/22297"}],"wp:attachment":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/media?parent=22291"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/categories?post=22291"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/tags?post=22291"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}