Announcing his “Diwali gift” for small and medium enterprises, Prime Minister Narendra Modi on Friday said that loans of up to Rs 1 crore will be sanctioned in 59 minutes through a special portal as part of the Centre’s Micro, Small and Medium Enterprises (MSME) Support and Outreach programme.
“I dedicate the 59-minute loan approval portal to you. All GST-registered small and medium enterprises can now avail a loan of up to Rs 1 crore in just 59 minutes,” PM Modi said while addressing the crowd at the launch of the programme at Vigyan Bhavan in the national capital. Follow LIVE UPDATES here.
“Also, GST-registered MSMEs will get two per cent interest subvention or rebate on an incremental loan of up to Rs 1 crore,” the prime minister said.
Accelerating India’s growth. Addressing the Support and Outreach Initiative for the MSME sector. https://t.co/dpMu2rVDyb
— Narendra Modi (@narendramodi) November 2, 2018
The programme was announced as part of a slew of measures by the Centre to give a boost to the country’s second largest employing sector.
Besides this, the government, the PM said, has decided to increase interest subvention on pre and post-shipment credit from three to five per cent. “Interest subvention on pre and post shipment credit for exports by MSMEs has been increased from three per cent to five per cent,” he said.
Modi also announced that inspections of factories in the sector will be sanctioned only through a computerised random allotment and inspectors will have to upload reports on the portal within 48 hours. “No inspector can now go anywhere. He will be asked why he went to a factory,” he said.
The PM also said that MSMEs will have to file just one annual return on eight labour laws and 10 central rules. He added that an ordinance has been promulgated to simplify levy of penalties for minor offences under the Companies Act.
Public sector companies, which were mandated to source 20 per cent of their annual procurement from MSMEs, will now source at least a quarter of their requirement (25 per cent) from the sector; three per cent of sourcing by PSUs would have to be done from MSMEs run by women, Modi said.
Hailing India’s improvement on World Bank’s latest ‘Ease of Doing Business’ ranking, Modi said in four years, his government has achieved what many did not believe and achieved what no other nation in the world has done – leaping from 142 rank in 2014 to 77th rank. “It is a matter of pride for us that India has taken a high jump of 23 ranks in ‘Ease of Doing Business’ ranking this time. Four years ago, when this government wasn’t in power, we were at the 142th position. Today, we are at the 77th rank and I believe that “top 50″ isn’t too far from our reach,” he told the audience.
PM Modi termed the 12 new measures “historic” that will make Deepawali brighter for the sector and its millions of entrepreneurs and employees.
The MSME sector constitutes a vast network of over 63 million units and employs 111 million people, contributing around 30 per cent to the GDP. It accounts for about 45 per cent of manufacturing output and around 40 per cent to total exports.
As per the Reserve Bank of India’s Mint Memo report, demonetisation imposed in November 2016 has led to further decline in the already falling credit to the MSME sector while GST rollout has not made any significant positive impact on overall credit to the sector but has deeply dented their exports.
About 97 per cent of MSMEs operate in the informal sector.
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