Now MSMEs will get loans up to Rs. 1 crore in 59-minutes
Prime Minister Shri Narendra Modi announced 59-minute loan sanctions, relaxation in labour laws, easier compliance with environmental rules and changes in company laws for micro, small and medium enterprises (MSMEs) to give a boost to the nation’s second-biggest employing sector on 02 November, 2018.
Shri Modi said the GST-registered MSMEs would be sanctioned a loan of up to Rs. 1 crore in just 59 minutes through a new portal. They would also get 2% subvention or rebate on incremental new loans of up to Rs. 1 crore. Interest subvention on pre and post shipment credit for exports by MSMEs had been increased from 3% to 5%.
To rid the sector of Inspector Raj, the PM announced that inspections of factories in the sector would be sanctioned only through a computerised random allotment and inspectors would 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.
Easing compliance with environmental rules, the MSMEs would need single air and water clearance and just one consent to establish a factory.
The MSMEs would have to file just one annual return on eight labour laws and 10 central rules, he said, adding that an ordinance had been promulgated to simplify levy of penalties for minor offences under the Companies Act.
PM Shri Modi termed the 12 new measures “historic” that will make Diwali brighter for the sector and its millions of entrepreneurs and employees.
Public sector companies, which were mandated to source 20% of their annual procurement from MSMEs, would now source at least a quarter of their requirement (25%) from the sector. Three % of sourcing by PSUs would have to be done from the MSMEs run by women. Also, all central public sector enterprises should take membership of the Government e-Marketplace (GeM) to facilitate online procurement of common use goods and services by various government departments and organisations.
Shri Modi announced Rs. 6,000 crore for the creation of 20 hubs and 100 tool rooms for technology upgradation. Clusters for MSMEs in pharma sector would be created to boost production in the sector, he said.
All companies with a turnover of more than Rs. 500 crore would have to now come on Trade Receivables e-Discounting System (TReDS) platform so that there was no cash flow problem for the MSMEs.
Talking of India jumping 23 places on the World Bank’s latest ‘Ease of Doing Business’ ranking, PM Shri Modi said in four years the NDA government at the Centre had achieved what many did not believe and what no other nation had done — leaping from 142 rank in 2014 to 77th position.