Online loans within 59 minutes among Modi’s MSME gifts
BOOST Labour laws eased, getting credit up to ~1 cr now easier
NEWDELHI: Prime Minister Narendra Modi unveiled on Friday several measures to support smalland medium-sized businesses as he offered better access to credit and easier compliance requirement for labour laws.
Micro, small and medium enterprise (MSME) businesses are seen as a major support base for the ruling Bharatiya Janata Party ( BJP), and Friday’s announcements could address some of the fallout from the November 2016 demonetisation and the disruptions caused by the rollout of the Goods and Services Tax in July last year – both moves that hit such businesses hard.
“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,” Modi said at an event in New Delhi billed as the government’s “support and outreach” programme for small businesses.
The MSME sector, Modi said, is the second-biggest job provider in India after farming.
The decisions include approving loan requests of up to ₹1 crore within 59 minutes, providing discounts on new loans for Gst-registered businesses, increasing mandatory purchases of prod- Micro, small and medium enterprises will get loans up to ₹1 crore approved in 59 minutes Interest rate for loans to every Gst-registered MSME to be 2% lower than market rate
Such businesses that are registered with GST will get even cheaper loans
Filings for 8 labour laws and for 10 central rules needed annually, instead of biannually
Inspectors for factories to be assigned at random
Companies Act will to be amended to ensure ‘inadvertent errors; do not result in prosecution
ucts from MSMES by state-run companies, making labour-law compliances easier, reducing government inspection of factories and simplifying environmental protection rules.
The move comes amid public differences between the Reserve Bank and the government on easing lending restrictions to improve liquidity in the system.
“These are very good steps and will address the problem of funds for the sector,” said SC Ralhan, president of a local manufacturers’ body in the northern district of Ludhiana, according to news agency Reuters.
Modi said a 2% cut in interest rates will apply for loans of up to ~1 crore for Gst-registered MSMES. The reduction would also apply to “incremental loans” taken by such MSMES.
He said banks will process loans under the new scheme by analysing the information provided by the applicant in their GST and income tax returns, in addition to the cash flow-related information already available with the bank. “Even while you file your GST return, the tax portal will ask if you need a loan,” said Modi.