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Government Launches Updated Credit Linked Capital Subsidy Scheme in MSME Sector - (05 Sep 2019)

Commercial

The Central Government has launched an updated Credit linked Capital Subsidy Scheme in order to allow micro, small and medium enterprises (MSMEs) access to capital. Shri Nitin Gadkari, Union Minister for Micro, Small and Medium Enterprises while speaking at a national workshop organized by the MSME Ministry, reiterated the Government's commitment to resolve chronic problems of the MSME including the issues of delayed payments to MSME. The workshop was attended by bankers, entrepreneurs and various stakeholders from the MSME sector as well as Ministry officials. During workshop, presentations were made by TReDS, Bombay Stock Exchange, Chamber of Indian MS&M Enterprises, National e-governance Services Limited etc. for steps to resolve issue relating to delayed payments.

Union Minister informed that, the Finance Ministry has taken initiative for the MSME sector which strengthen the sector and also assured the implementation of recommendations made by U.K. Sinha committee set up by the Reserve Bank of India to suggest expeditious ways to strengthen MSMEs. Mr. Gadkari further highlighted that, Credit linked capital subsidy scheme would be crucial in raising MSME contribution to gross domestic product and would also increase exports from the sector. The Union Minister also stated that, a committee was being set up under the MSME secretary to look into the issue of delayed payments which is a core issue in the sector wherein it is estimated that public sector undertakings owe MSMEs above Rs 48,000 crore.

Credit Linked Capital Scheme provides 15% subsidy for additional investment up to Rs.1 crore for technology up-gradation by MSMEs. An updated scheme further provides an additional 10 percent subsidy to SC-ST entrepreneurs and incorporated special provisions for 117 'aspirational' districts, hill states and the north-eastern region. In this regard, MoUs were also signed by the office of DC, MSME with 11 Nodal Banks which will further strengthen the MSME Sector. In the month of February this Year, the Cabinet Committee on Economic Affairs had approved an outlay of Rs 2,900 crore for the scheme.

To further strengthen and infuse encouragement in the MSME sector, the Central Government is exploring immediate possibilities to improve the Trade Receivables Discounting System (TReDS) platform and the online bill discounting platform, which facilitates MSMEs to raise finance by selling their trade receivables to corporate entities and it also includes suggestions expanding the number of exchanges allowed on TReDS and connecting the same with the Government’s own e-marketplace platform i.e. the government's chief public procurement portal.

The MSME are classified into two classes one is manufacturing enterprise and the second is service enterprise and this sector has emerged as a highly vibrant and dynamic sector of the Indian economy over past few decades. MSMEs are playing crucial role in providing large employment opportunities at comparatively lower capital cost than large industries and are also helping in industrialization of rural & backward areas. MSME sector is complementary to large industries as ancillary units and this sector contributes enormously to the socio-economic development of the country. All it need is more encouragement and attention by the Government so that it can be made more accessible to people across all factions of society who can dream of and stand on their own footing even in unstructured environment and these MSMEs can play a big role in sustaining economic slowdown as compared to large industries.

Tags : SCHEME   LAUNCH   MSME SECTOR  

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