New Delhi: Finance Minister Nirmala Sitharaman in her Union Budget speech termed Micro, Small and Medium Enterprises (MSMEs) as the second growth engine of the nation.
MSMEs responsible for 45 pc of India's exports
She said over 1 crore registered MSMEs employ 7.5 crore people in the country. These units generate 36 per cent of the nation's manufacturing have come together to position India as a global manufacturing hub. "With their quality products, these MSMEs are responsible for 45 per cent of India's exports," she said. In order to help MSMEs achieve higher efficiencies of scale, technological upgradation and better access to capital, the investment and turnover limits for classification of all MSMEs will be enhanced to 2.5 and 2 times respectively. "This will give them confidence to grow and generate employment for our youth," Sitharaman.
Credit guarantee cover for MSMEs enhanced
She said in order to improve access to credit, the credit guarantee cover will be enhanced for MSMEs. For micro and small enterprises, it will be enhanced from Rs 5 crores to Rs 10 crores leading to additional credit of Rs 1.5 lakh crores in the next five years. For startups, it will be enhanced from Rs 10 crores to Rs 20 crores with the guarantee fee being moderated to 1 per cent for loans in 27 focus sectors vital for 'Atmanirbhar Bharat'. For well run exporter MSMEs, term loans will be provided for up to Rs 20 crores.
Customised credit cards
For micro enterprises registered on Udyam portal, the government will introduce customised credit cards with Rs 5 lakh limit. In the first year, 10 lakh such cards will be issued, Sitharaman said.
New Fund of Funds
The alternate investment fund (AIF) for startups have received commitments of more than Rs 91,000 crores and these are supported with fund of funds set up by Government of India's contribution of Rs 10,000 crores. Now, a new fund of funds with an expanded scope and fresh contribution of another Rs 10,000 crores will be set up, the Finance Minister said.
New scheme for first time women entrepreneurs
A new scheme will be launched for five lakh SC and ST women who are first time entrepreneurs. As per the scheme, such women will be given term loans of up to Rs 2 crores during the next five years. The scheme will incorporate lessons from the successful 'Standup India' scheme. Online capacity building for entrepreneurship and managerial skills will be organised, Sitharaman said.
Highlights
Investment and turnover limits for classification for MSMEs to be enhanced to 2.5 to 2 times respectively
Credit guarantee cover for MSMEs to be enhanced
Credit guarantee cover for micro and small enterprises to be enhanced from Rs 5 crores to Rs 10 crores
For startups, it will be enhanced from Rs 10 crores to Rs 20 crores
Guarantee fee for startups to be moderated to 1 per cent
Term loans of up to Rs 20 crores for well run exporter MSMEs
Customised credit cards of Rs 5 lakh limit for micro enterprises
10 lakh credit cards to be issues in the first year
New Fund of Funds with expanded scope and fresh contribution of Rs 10,000 crores
New scheme for five lakh SC and ST first time women entrepreneurs
