MSMEs gain boost from Aatmanirbhar Bharat Abhiyan economic package amidst lockdown

By OEM Update Editorial May 15, 2020 1:51 pm

Honourable Prime Minister Narendra Modi in his recent public address announced the Aatmanirbhar Bharat Abhiyan economic package that is aimed at boosting the national economy by infusing liquidity and promoting local manufacturing. Finance Minister Nirmala Sitharaman discussed the first instalment of the ₹20 lakh crore package with a focus on the MSME sector.

Stating that the package rests on the five pillars of Economy, Infrastructure, Technology-driven systems, Demography, and Demand, the Finance Minister added that the focus will be on the factors of production, i.e., Land, Labour, Liquidity, and Laws. The major steps announced for the revival of MSMEs are as follows:

• Collateral-free loan of ₹3 lakh crores for MSMEs will aid 45 lakh MSME units so that they can resume operations and protect jobs.

• Subordinate debt provision of ₹20,000 crores will benefit 2 lakh MSMEs that are NPAs or stressed assets.

• Under the new definition of MSMEs (Micro units with investment till ₹1 crore and turnover up to ₹5 crores; Small units with investment till ₹10 crores and turnover up to ₹50 crores; and Medium units with investment till ₹20 crores and turnover up to ₹100 crores), MSMEs can work on expansion without losing benefits. There will also be no distinction between manufacturing and service sector MSMEs.

• Equity of ₹50,000 crore will be infused through Mother fund-Daughter fund for MSMEs that are viable but need aid. A fund of funds with a corpus of ₹10,000 crore will be set up to help such MSMEs increase capacity and be listed on markets if they choose.

• E-market linkages will be provided across the board in the absence of non-participation in trade fairs due to COVID-19. The government of India and PSUs will clear all receivables in the next 45 days.

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