Cabinet takes a step towards 'Atmanirbhar Bharat'; Approves Rs.20,000 Crore Package for Distressed MSMEs

Under the Chairmanship of Prime Minister Narendra Modi, a special meeting of Cabinet Committee on Economic Affairs (CCEA) was convened, which approved the upward revision of MSME definition and modalities/roadmap to laydown mechanisms for the remaining two announcements of Atmanirbhar Bharat Package announced earlier by Finance Minister Nirmala Sitharaman.

The Cabinet approved Rs.20,000 crore package for distressed MSMEs, which will benefit two lakh stressed units, along with approving Rs.50,000 crore for MSMEs through Fund of Funds to establish a framework to help them in capacity augmentation, which will provide an opportunity to get listed in stock exchange. The government further amended the definition of MSME. The micro manufacturing and services unit was increased to Rs.1 crore of investment and Rs.5 crore of turnover, small unit was revised to Rs.10 crore of investment and Rs.50 crore of turnover, and medium unit to Rs.20 crore of investment and Rs.100 crore of turnover. This revision comes after 14 years of the existence of MSME Development Act.

Various other announcements were made under the package, which include Rs.3 lakh crore collateral-free automatic loans for MSMEs to meet operational liabilities, buy raw materials and restart businesses;

The Centre also launched a special micro credit scheme name Pradhan Mantri Street Vendors AtmaNirbhar Nidhi

revision of MSME definition to render maximum benefits to the sector; disallowing global trends in procurements up to Rs.200 crore to create more opportunities for domestic players; and clearing of MSME dues by the government and public sector units within 45 days.

The Centre also launched a special micro-credit scheme, name ‘Pradhan Mantri Street Vendor’s AtmaNirbhar Nidhi’. It will provide affordable loan of up to Rs.10,000 to street vendors, benefiting 50 lakh vendors in urban and rural areas. The ministry said that the vendors can avail a working capital loan of up to Rs.10,000, which is repayable in monthly installments in the tenure of one year. If the payments are made on time or early, the vendors will be provided an interest subsidy of seven percent per annum, which will be credited to their bank accounts through direct benefit transfer on six monthly basis.

PM Modi also said that to give impetus to the campaign for a self-reliant India, we have not only changed the definition of MSMEs, but have also approved several proposals to revive it. This will benefit the small and medium scale industries which will also create huge employment opportunities.