7 INITIATIVES MICRO AND SMALL BUSINESS OWNERS SHOULD KNOW

The Micro, Small and Medium Enterprise (MSME) sector plays a significant role in the growth of the Indian economy. They employ over 11 crore people. Over the past year, the government has announced several new initiatives.

1 Credit linked capital subsidy scheme The Credit Linked Capital Subsidy Scheme (CLCSS) provides a subsidy of 15% on institutional finance of up to `1 crore. The aim of this scheme is to facilitate the upgradation of technology in MSMEs. Entrepreneurs can avail subsidies on loans from banks such as Bank of Baroda, State Bank of India, Punjab National Bank and Small Industries Development Bank of India (SIDBI) among others1. 2 MSME Sampark MSME Sampark is a digital platform that directly connects jobseekers (students who graduate from MSME Technology Centres) to small businesses and entrepreneurs. To know more, you can check: www.sampark.msme.gov.in 3 59-minute loan portal The government introduced an online business loan portal through SIDBI where MSMEs can avail loans in 59 minutes or less. Business owners can visit the official website, www.psbloansin59minutes.com to get loans ranging from `1 lakh to `5 crore. Over 1,10,000 proposals have already been processed through this platform with sanctions worth `17,300 crore till September 30, 2019. 4 Mandatory procurement by CPSUs All Central Public Sector Undertakings (CPSUs) that were mandated to procure 20% of their annual procurement from MSMEs have to now source at least 25% of their requirement from this sector. Also, the government directed that out of the 25%, CPSUs should make mandatory procurement of 3% from women entrepreneurs and 4% from MSMEs owned by Scheduled Cast/Scheduled Tribe (SC/ ST) entrepreneurs2. To facilitate this, all CPSUs must compulsorily be a part of the public procurement portal Government e-Marketplace (GeM). 5 Government e-Marketplace (GeM) The Government e-Marketplace (GeM) is a portal where government agencies procure various products from different sellers in the country. Recently, the Department of Commerce entered into a pact with SIDBI to make it easier for MSMEs, Self Help Groups, women entrepreneurs and other loan beneficiaries to sell their products on the platform. Special initiatives like ‘Start-up Runway’ and ‘Womaniya’ help entrepreneurs sell their products directly to government institutions. 6 Support for Pharma MSMEs The Indian government has formed MSME pharma clusters to support the sustainability and growth of pharma companies. These clusters would address common issues for businesses like technology, skills, access to capital and market access. The government has promised to bear 70% of the cost of establishing these clusters. 7 Legal procedures simplified To ensure that entrepreneurs are able to access timely credit, companies with a turnover greater than `500 crore have to be registered on Trade Receivables e-Discounting System (TReDS) platforms like Receivables Exchange of India (RXIL). This is an electronic platform set up by SIDBI and National Stock Exchange to support easy financing of MSMEs. You can check www.rxil.in to know more.