Synopsis..
After the hon. PM announced Government plan to atam nirbhar that is self reliant the country was looking for a clarity. As per the recent announcements by the FM it seems that the definition of micro, small and medium enterprises (MSMEs) as part of the Atma Nirbhar Bharat Abhiyan (self-reliant India) economic relief package announced by Prime Minister Narendra Modi on Tuesday.
PM Modi announced Rs 20 lakh crore – equivalent to 10 per cent of India’s GDP — to support an economy badly hit by the 50-day lockdown to fight the spread of COVID-19.
Finance Minister announces collateral-free loans worth Rs 3 lakh crore for MSMEs with turnover up to Rs 100 crore till October 31, 2020
• Move likely to benefit 45 lakh units so they can resume their businesses
• 4-year collateral-free loans to be 100% credit-free, with a moratorium for first 12 months
• Definition of MSMEs being changed
• Company with investment of Rs 1 crore, turnover of Rs 5 crore is a micro enterprise under new definition; one with Rs 10 crore investment, turnover of Rs 50 crore a small enterprise; one with Rs 20 crore investment, Rs 100 crore turnover a medium enterprise•
• Government support in form of 12 per cent employer and 12 per cent employee contribution extended for another three months: June, July and August (government to pay employee, employer contribution to EPF accounts)
• Support towards months March, April, May already announced earlier as part of PM Garib Kalyan scheme; that scheme being extended for another three months (June-August)
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• Post-Covid exhibitions would be difficult. Would ensure e-market linkage across the board so that they can find their market easily
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• Intention is to make local brands and build them to global level, a global value chain integration part of this vision. A confident India which can rest on strengths and also contribute to the world. Production of ventilators has grown rapidly, we have the capability and enterprise, we’ll continue contributing to the globe. We are working tirelessly for the poor of the country, the migrants of the country, the farmers and small businesses of the country
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• MSME definition changed. Changed in favour of MSMEs. There was this fear that if they outgrow size, they’ll lose benefits they’d get. Change so that they need not worry about growing in size, they’d still be able to get benefits. Investment limit, which defined MSME, is being revised upwards. Idea is that even with increased investment, you’d still be defined as MSME. Additional turnover criteria, apart from investment size. Differentiation between manufacturing or service-based MSME being removed. They shall be defined similarly. So now your investment can be up to 1 crore, turnover up to 5 crore, you shall be called micro enterprises
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• Liquidity relief being given for all EPF establishments. In this, 12% which is paid by employer and 12 by employee contribution, we extend the support for another 3 months. Payments were made into eligible accounts by government for March, April and May. Some 3.6 lakh establishments benefited.
• What was given earlier for March, April and May, is being extended to another 3 months, would be infusing 2,500Cr liquidity and 7.22L employees will benefit
