Cabinet clears huge relief to MSMEs, street vendors

MSP for 14 kharif crops hiked by 150%

In order to give relief to micro, small and medium enterprises (MSMEs) and street vendors, the most affected by the Covid-19 outbreak, the Union Cabinet on Monday cleared a `20,000-crore plan for them, as well as a `50,000-cr “Fund of Funds” under which street vendors can get loans up to Rs 10,000.

Besides this, the Cabinet also cleared a 150 per cent hike in the minimum support price for kharif crops, that will give farmers 80 per cent profits against costs. This will apply to 14 kharif crops.

The Cabinet Committee on Economic Affairs (CCEA), chaired by Prime Minister Narendra Modi, also cleared the upward revision of MSMEs, enhancing the turnover limit for classifying units as “medium” units to ` 250 crores from `100 crores announced last month. The CCEA also decided the turnover with respect to exports will not be counted in the turnover limits for any MSME category, MSME minister Nitin Gadkari told reporters after the Cabinet meeting.

The revision in the MSME definition was done 14 years after the MSME Development Act came into existence in 2006.

Farmers were given an extension of three months to repay loans. The time limit has been extended from May 31 to August 31.

Under the `20,000-crore package, around two lakh MSME units will benefit, while under the `50,000crore package for street

vendors, hawkers, cobblers and salons can get loans of up to `10,000. Around 50 lakh vendors will benefit.

The Cabinet also cleared the new definition of MSME units. Micro-units, earlier defined by investments of up to `25 lakhs and a turnover of `10 lakhs, can now invest up to `1 crore and have a turnover of Rs 5 crore.

For small enterprises, the investment limit was raised from `5 crores to `10 crores and the turnover limit extended from `2 crores to `50 crores.

For medium units, the finance ministry proposed an investment limit hike from `10 crores to ` 20 crores and turnover from `5 crores to Rs 100 crores. But the Cabinet hiked the investment limit by up to `50 crores and `250 crores for turnover.