59-minute quick access scheme for loan
Prime Minister Narendra Modi launched the 'Support and Outreach' initiative for Micro Small and Medium Enterprises (MSMEs) on Friday, in Delhi. The PM announced that 12 important decisions have been taken by the government for MSMEs. Several decisions have already been implemented in the past couple of days.
PM Modi announced at the event that the government is launching a quick access scheme for a loan of up to Rs 1 crore for the MSME sector. A 59-minute loan portal has been launched across the country. He said, "To ease access to credit for the MSME sector, it has been decided to launch a portal that will permit completing formalities for grant of loan of up to Rs 1 crore in 59 minutes." He also announced that a 2% rebate for loans of up to Rs 1 crore will be provided to GST-registered MSMEs.
A loan option has been launched for GST registered MSMEs through the GST portal as well, where MSMEs can apply for loan. Interest subvention on pre and post shipment credit for exports by MSMEs increased from 3 per cent to 5 per cent by the government. Mandatory sourcing by PSUs from MSMEs has been increased to 25 per cent from the previous limit of 20 per cent. He added that these incentives will help small and medium enterprises.
The government has also made it mandatory for big companies to register on trade receivable discounting site. Large companies are requested to clear the bills of MSMEs expeditiously. In order to boost female entrepreneurs in the country, it is now mandatory for government companies to buy at least 3 per cent of their purchases from women entrepreneurs only.
Regarding scrutiny on MSMEs, he said, “To do away with unnecessary scrutiny, the government has decided to regulate inspector visits with a computerized random allotment system. Now he can’t just go to any place on his own volition and will have to enter the report on the portal in 48 hours. This decision will prove to be very important in reducing the Inspector Raj to small-scale industries. Now no Inspector will come to you. He will be asked why you went to that factory, what was the motive.”
To ease compliance with environmental rules, it was announced that MSMEs will need a single air and water clearance and just one consent to establish a factory. It is mandatory for central public sector enterprises to take membership of the Government e-Marketplace (GeM) in order to facilitate online procurement of common use goods and services by various government departments and organisations.
In order to deal with the cash flow of MSMEs, all companies with a turnover of more than Rs 500 crore would have to now come on Trade Receivables e-Discounting System (TReDS) platform.
The world bank released the ease of doing business ranking recently and India showed massive improvement by jumping 23 spots to land at 77th position. Talking about this leap, PM Modi said the breaking into top 50 is possible.