INTEREST SUBVENTION SCHEME TO FORMALIZE MSMES AND FACILITATE GROWTH

Introduction: Micro, Small and Medium Enterprises (MSMEs) plays an important role in Indian economy, it accounts 45% of manufacturing output of country. In terms of employment generation, it accounts next to agriculture sector, contributing 8% to GDP. This sector is the backbone of India's economy and is considered the 'cradle' of 'Make in India' initiative.

- N Mohammad Ali

Being majority of MSMEs are unorganized and cash-dependent, this sector witnessed the impact of Note-ban (demonetization) and roll out of Goods and Service Tax (GST). The biggest challenge is that formalization of sector, according to an estimate, 90 per cent of the MSME sector falls in the unorganized sector, not a tech-savvy, making it difficult for schemes and programmes.

Despite a slew of measures such as 'Make in India', 'Skill India', 'Digital India', 'Start-Up India' etc. taken by Govt. along with various incentives for the sector, may find it difficult to outreach unregistered MSMEs.

Considering,

1) Access to credit,

2) Access to market,

3) Technology upgradation,

4) Ease of doing business, and

5) A sense of security for employees as five key aspects for facilitating MSME sector. Govt. made twelve announcements to address each of these five categories.

Twelve initiatives taken by GOI on 02nd November 2018:

psbloansin59minutes.com

For GST registered MSMEs 2 % interest subvention on fresh or incremental loan

Interest subvention on export credit increased from 3% to 5 %

Visit by Inspector through computerized random allotment to get rid of Inspector Raj.

Single consent water & air pollution laws. Only 10 % units will be inspected.

Single annual return on 8 labour laws & 10 Central rules

PSUs to source 25 % of annual procurement from MSME instead of 20 %

PSUs to source 3 % from MSMEs run by women.

Central PSUs to compulsorily procure through Government e- Market Place portal

Rs.6000 crores for creation 100 technology centers.

GoI to bear 70 % of cost for establishing pharma cluster.

TReDs platform