Government to impart Rs 20,000 crore into MSME sector: approves modalities and roadmaps for implementation

In an attempt to boost the MSME (Micro, Small and Medium Enterprises) sector which has been the hardest hit due to the nationwide coronavirus lockdown, the cabinet committee on Economic Affairs (CCEA) on Monday, announced that it would impart Rs.20,000 crores into the sector.

The turnover limit for medium enterprises was revised and it further ascended to Rs.250 crore from Rs.100 crore as declared earlier.The cabinet also asssented the increase in the Minimum Support Prices (MSPs) for all mandated kharif crops for the 2020-21 marketing season, the plan was implemented in order to ensure lucrative prices for the growers of those who are involved in it's production. The highest increase in MSP is expected for nigerseed (Rs 755 per quintal) followed by seasamum (Rs 370 per qyintal), urad (Rs 300 per quintal) and cotton (long staple, Rs 275 per quintal). The difference in costs is to encourage crop diversification.

The cabinet approved modalities and road maps for implementing 2 packages for MSMEs - Rs.20,000 cr package for distressed MSMEs and Rs 50,000 cr equity infusion through funds. The latest move of Rs 20,000 crore arrives weeks after "Collateral-free-loans for MSMEs worth Rs. 3 lakh crore" was declared by Finance Minister, Nirmala Sitharaman as part of the AatmaNirbhaf Bharat Abhiyaan economic package

In addition to this, while detailing the packages on MSMEs sector, Mr Nitin Gadkari, the minister for MSME and Road Transport and Highway minister, underlined, 'Cabinet has approved modalities and road map for implementing two packages for MSMEs- Rs. 20,000 crore package for distressed MSMEs and Rs 50,000 crore equity infusion through Funds of Funds.'

Apart from this, it also announced that micro enterprises can now invest up to Rs. 1 crore and have a turnover of Rs. 5 crore. Individually, for the small entwrprises, the limit for investment has been ascended to Rs 10 crore along with a turn over limit of Rs. 50 crore. For medium enterprises, the investment limit has heightened upwards to 20 crore and the turnover limit has been raised to 250 crore which earlier was announced to be Rs. 100 crore.

'It is remarkable that the new MSME definition has been brought about 14 years after the implementation of the MSME Development Act 2006' said Information and Broadcasting minister, Mr Prakash Javedkar.