Modi presents MSMEs with Diwali Bonanza, loans upto 1 Crore to be approved in just 59 mins

Addressing the Support and Outreach initiative for MSMEs, PM Modi made a series of announcements on Friday evening. He said he has finalized 12 policy for helping MSME Business Entrepreneurs terming it as a ‘Diwali Gift’ for them.

The first announcement made by PM Modi was regarding loans. He stated that any businessmen or businesswomen can get a loan up to Rs 1 crore approved from any part of the country in just flat 59 mins. 59-minute loan portal was launched by him where MSMEs can seek loans up to Rs 1 crore.

Adding to his comment, he said that GST registered MSMEs will get a cut of 2% on the interest on new loans or incremental loans up to 1 Cr. Now registering for GST and Tax filling will provide a rebate of 2% to the MSMEs. Besides, the government has increased the rate-cut in the interest in the loans to exporters during the period between pre-shipment and post-shipment from 3% to 5%. This was his 2nd policy decision.

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In his 3rd announcement, he stated that all the companies whose turnover is above 500 crores will have to mandatorily register themselves on Trade Receivables e-Discounting TReDS platform so that MSMEs don’t suffer from insufficient cash flow.

According to the PM, last year the government bought goods worth Rs 14 lakh crores from different sources. According to the established rule, the government companies have to buy 20% of their total purchase from small and micro scale industries. In his 4th announcement, he claimed that the government has increased this share to 25% to help the small and micro scale industries.

In a major boost to women empowerment, PM Modi’s 5th announcement was related to female entrepreneurs. He announced that from the total 25% of mandatory purchase the government will make from small and micro scale industries, 3% will be reserved for purchase from female entrepreneurs. It is imperative for government companies to buy 3% of their purchase from women entrepreneurs.

Talking about his 6th announcement, PM Modi said it will necessary for government companies to subscribe to GeM portal. Not just that, they will also have to register all their vendors-MSMEs on this platform which will immensely benefit the MSMEs.

PM Modi in his 7th announcement talked about Technological upgradation. 20 hubs will be established across the country with 100 toolrooms acting as spoke. The prime minister earmarked Rs 6,000 crores for implementation of this project.

“The central government will invest 70% of the cost in developing clusters for Pharma MSMEs to enhance their ability to do business and reach their customers directly,” said PM Modi in his 8th announcement.

In order to simplify government processes for the MSMEs, PM announced his 9th policy in which the MSMEs will have to submit the least number of forms and returns. The return related to 8 labour laws and 10 central rules will now have to be filed just once in the year, not twice.

The central government is committed to reducing Human Intervention and in his announcement of 10th policy, PM Modi stated to get rid of unnecessary scrutiny, where would the inspector go will now be decided by a random computer program which will arbitrarily provide the allotment and the inspector will have to file a report on the portal within 48 hours. This will stop arbitrary raids done by inspectors and he will be accountable for the raids he makes.

Talking about ease of Environment Clearance to the companies, in his 11th announcement PM Modi said ‘Self-Certification’ in this regard will be promoted. The government has decided to consolidate both air pollution and water pollution laws, so that the MSMEs will have fill only one consent form. “The government will trust you and issue a Self-Certification form based on your inputs,” he said.

Talking about his last policy decision, PM Modi said that they have made a big decision regarding the Companies Act, providing relief from the legal complications to the MSMEs. Companies Act had draconian rules that termed MSMEs criminals even for minor unintentional violations and forced small businessmen to waste their times in court proceedings. The government has brought a new ordinance and the MSMEs will not have to waste their time in courts to correct minor errors. They can go to the specific department and get the error rectified.

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

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