PM Modi’s Diwali gift to MSMEs: Loans in 59 min, special benefits for women entrepreneurs

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New Delhi: Prime Minister Narendra Modi on Friday launched the Micro, Small and Medium Enterprises (MSME) Support and Outreach Programme on Friday to enhance credit access to the sector.

Speaking at the launch of  Union Government’s Support and Outreach Initiative for MSMEs in New Delhi, PM Modi announced the national roll out of online platform for MSME credit which will enable businesses to get loans upto Rs 1 crore within just 59 minutes.

The MSME sector constitutes a vast network of over 63 million units and employs 111 million people, contributing around 30 percent to the GDP. It accounts for about 45 percent of manufacturing output and around 40 percent to total exports.

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Touching upon several matters of vital interest to the MSME sector, Modi Made 12 major announcements that are vital for the MSME sector. These are:

1. Modi announced the national roll out of online platform for MSME credit which will enable businesses to get loans upto Rs 1 crore within just 59 minutes. The Portal reduces the loan processing turnaround time from 20-25 days to 59 minutes. Subsequent to this in principle approval, the loan will be disbursed in 7-8 working days.
2. All the MSMEs registered under GST will get 2 percent interest rebate on loans worth upto Rs 1 crore or on incremental loans.
3. Interest waiver on  Pre-Shipment and Post Shipment tenure for exporters will be hiked from 3 percent to 5 percent.
4. Companies with over Rs 500 crore turnover will be brought under Trade Receivables e- Discounting System (TreDS), so that MSMEs don’t have to face difficulties in cash flow.
5. Last year government companies brought goods of over Rs 1.14 thousand crore from various sources out of which it was mandatory to purchase 20 percent goods from MSMEs. Now the limit has been hiked to 25 percent. Of the increased limit, 3 percent will be reserved for women entrepreneurs. It will be now mandatory for government companies to procure 3 percent goods from women entrepreneurs.
6. All government companies must take GeM membership. All the MSME vendors will be registered under this platform.
7. Modi announced Rs 6 thousand crore for establishment of Tool room across the country. 20 hubs will be made across the country and 100 spocs of Tool Rooms will be made.
8. Government will  make clusters for MSME sector related to pharma industries. Government will spend 70 percent on these clusters.
9. Filing of Single Unified Annual Return for 8 Labour Acts (10 Central Rules) will now have to be done once instead of twice.
10. In order to minimise Human Intervention , a Computerized Random Allotment will now decide where inspector will go. He has to upload the report in the portal within 48 hours.
11. Simplification of Environmental Clearance and Self Certification. Government will merge air and water pollution norms for MSME so that they can take single consent.
12. Now MSMEs can go to the concerned department for redressal of minor violations.