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Centre announces Rs 20,000 crore for stressed MSMEs, hikes MSP for kharif crops

This is the first meeting of the Cabinet after the ruling NDA government completed the first year of its second term in office.

By: Express Web Desk | New Delhi | Updated: June 1, 2020 7:46:52 pm
Visuals from Prime Minister Narendra Modi’s Union Cabinet meeting today. (PIB/Twitter)

In a bid to boost the fledgling MSMEs, which has been hit the hardest due to the Covid-19 lockdown, the Union Cabinet on Monday approved an infusion of Rs 20,000 crore into the sector besides announcing a slew of measures to help alleviate the distress in the farm sector.

Addressing a media briefing, Union Minister Nitin Gadkari said the Cabinet had approved modalities and road map for implementing two packages for MSMEs. “This includes a Rs 20,000 crore package for distressed MSMEs, which will benefit 2 lakh stressed MSMEs and Rs 50,000 crore equity infusion through Fund of Funds,” Gadkari said.

This comes on the back of collateral-free loans for MSMEs worth Rs 3 lakh crore that was announced by Finance Minister Nirmala Sitharaman as part of the Atmanirbhar Bharat Abhiyan economic package.

Meanwhile, the government further amended the definition of MSME. Turnover limit for medium enterprises has been revised upward to Rs 250 crore (from Rs 100 crore as announced earlier).

In a move that will help farmers, the Centre increased minimum support prices (MSP) for 14 kharif crops by 50-83 per cent. The government also hiked MSP for paddy by Rs 53 per quintal to Rs 1,868 per quintal for the 2020-21 crop year while the MSP for cotton has been increased by Rs 260 to Rs 5,515 per quintal. The rates for oilseeds, pulses and cereals were also hiked substantially.

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The government has also extended till August 31 the repayment date of short-term crop loan of up to Rs 3 lakh for agriculture and allied activities. “The farmers will get more time to repay their loans, till August now,” Union Minister Narendra Tomar said at the media briefing of Cabinet decisions.

The Centre also launched a special micro-credit scheme, named ‘Pradhan Mantri Street Vendor’s AtmaNirbhar Nidhi’, to provide affordable loan of up to Rs 10,000 to street vendors. The scheme is likely to benefit 50 lakh street vendors in the urban and rural areas of the country.

Those who were vending till March 24 this year can avail the benefits of the scheme, the duration of which is till March 2022, a statement by the Union Housing and Urban Affairs Ministry said.

“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. On timely or early repayment of the loan, an interest subsidy of seven per cent per annum will be credited to the bank accounts of the beneficiaries through direct benefit transfer on six monthly basis,” the ministry said.

The announcement comes hours after Prime Minister Narendra Modi chaired a meeting of the Union Cabinet on Monday as the nation entered the ‘Unlock 1‘ phase following a two-month strict coronavirus lockdown. This was the first meeting of the Cabinet after the ruling NDA government completed the first year of its second term in office.

In a series of tweets, Prime Minister Narendra Modi said the decisions would bring about positive changes in the lives of farmers, labourers and workers.

“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, as well as create huge employment opportunities,” Modi said.

PM Street Vendor’s Atma Nirbhar Nidhi (PM SVANidhi) is a very special scheme, he said. “For the first time, our street vendors are a part of a livelihood programme. This scheme will ensure support for street vendors. It harnesses technology and emphasises on capacity building,” he said.

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