India’s Modi unveils aid for small businesses
NEW DELHI — India’s Prime Minister Narendra Modi on Friday unveiled a dozen measures to support small- and mediumsized businesses, as he aims to woo a large voting bloc ahead of a national election next year.
The move comes after a unified Goods and Services Tax (GST), launched more than a year ago, drove many small enterprises out of business and put hundreds of thousands out of work, handing a big political weapon to opposition parties.
The so-called micro, small and medium enterprise (MSME) sector is the second-biggest job provider in India after farming, Mr. Modi said.
“I believe that small enterprises will give a new form and shape to the country’s industrial revolution and build the foundation of technology-driven clean business,” Mr. Modi said at an event in New Delhi starting a 100-day “support and outreach” program for small businesses.
The decisions include approving loan requests of up to 10 million rupees ($138,000) within 59 minutes, providing discounts on new loans for GST-registered businesses, increasing mandatory purchases of products from MSMEs by state-run companies, making labor-law compliance easier, reducing government inspections of factories and simplifying environmental protection norms.
The announcement counters overtures by the main opposition Congress party to small businesses, which make up 32% of the economy and employ 111 million people. Congress leader Rahul Gandhi said in August he would seek to shift the focus of the country’s economic policy towards supporting small and mediumsized firms if the opposition won power in next year’s election.
The GST, India’s biggest ever tax reform, was aimed at replacing more than a dozen federal and state levies. —