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New Delhi : Union Cabinet chaired by Prime Minister Narendra Modi met on June 1, 2020. This was the first meeting of the Union Cabinet after the Central Government entered into its second year in office. During the meeting, historic decisions were taken that will have a transformative impact on the lives of India’s hardworking farmers, MSME sector, and those working as street vendors.
Helping hand to MSMEs: Micro, small and Medium Enterprises popularly ( MSMEs) are the backbone of Indian economy. Silently operating in different areas across the country, more than 6 crore MSMEs have a crucial role to play in building a stronger and self-reliant India. In the aftermath of COVID-19 pandemic, PM Narendra Modi was quick to recognise the role of MSMEs in building the Nation. That is why MSMEs formed a very prominent part of the announcements made under the Atmanirbhar Bharat Abhiyaan.
Under this package, the MSME sector has not only been given substantial allocation but has also been accorded priority in implementation of the measures to revive the economy. on June 1, Government of India (GoI) laid down the roadmap for effective implementation of several announcements made under the Atmanirbhar Bharat Package too. Theye include: Upward revision of MSME Definition. This is yet another step towards ease of doing business. This will help attracting investments and creating more jobs in the MSME sector. Proposal for provisioning of Rs 20,000 crore as subordinate debt to provide equity support to the stressed MSMEs has been formally approved by the cabinet. This will benefit 2 lakh stressed MSMEs.
Proposal for equity infusion of Rs 50,000 crore for MSMEs through fund of funds was also approved by the Cabinet on June 1, 2020. This will establish a framework to help MSMEs in managing the debt-equity ratio and in their capacity augmentation. This will also provide an opportunity to get listed in stock exchanges.
The Government of India on June 1 decided for further upward revision of MSME definition. In the package announcement, the definition of micro manufacturing and services unit was increased to Rs. 1 crore of investment and Rs 5 crore of turnover. The limit of small unit was increased to Rs 10 crore of investment and Rs 50 crore of turnover.
Similarly, the limit of a medium unit was increased to Rs 20 crore of investment and Rs 100 crore of turnover. It may be noted that this revision was done after 14 years since the MSME Development Act came into existence in 2006. After the package announcement on May 13, 2020, there were several representations that the announced revision is still not in tune with market and pricing conditions and it should be further revised upwards.
Keeping in mind these representations, the Prime Minister decided to further increase the limit for medium manufacturing and service units. Now it will be Rs. 50 crore of investment and Rs 250 crore of turnover. It has also been decided that the turnover with respect to exports will not be counted in the limits of turnover for any category of MSME units whether micro, small or medium, according to a PIB release.
Supporting our hardworking street vendors: The Ministry of Housing and Urban Affairs has launched a Special Micro-Credit Facility Scheme – PM SVANidhi (PM स्वनिधि ) – PM Street Vendor’s AtmaNirbharNidhi, for providing affordable loans to street vendors. This scheme will go a long way in enabling them resume work and earn livelihoods. Over 50 lakh people including vendors, hawkers, thelewalas, rehriwala, theliphadwala etc. in different areas/ contexts are likely to benefit from this scheme.
The goods supplied by them range from vegetables, fruits, ready-to-eat street foods, tea, pakodas, breads, eggs, textiles, apparel, footwear, artisan products, books/ stationaries etc. The services include barber shops, cobblers, pan shops, laundry services etc. The Government of India is sensitive towards the problems they have faced in the wake of the COVID-19 crisis. In such a time, there is an urgent need to provide affordable credit to them to ensure their business gets a boost. Urban Local Bodies will play pivotal role in the implementation of the scheme.