MSME Benefits Under Atma Nirbhar Bharat Abhiyan Announced by Govt.

MSME stands for Micro, Small and Medium Enterprises. In a developing country like India, MSME industries are the backbone of the economy.

 Objective of ATMA- NIRBHAR BHARAT ABHIYAN

• Interim measures such as liquidity infusion and direct cash transfers for the poor.
• long-term reforms in growth-critical sectors to make them globally competitive and attractive.

Decisions taken by Govt. for the growth of MSME Sector under the ATMA- NIRBHAR BHARAT ABHIYAN

1. Collateral Free Loans

• Rs. 3 Lakh crores to collateral free automatic loans for businesses, including MSMEs
• This scheme is implemented by Department of Financial Services.
• Borrowers with upto Rs. 25 Cr. Outstanding and Rs. 100 Cr. Turnover eligible.
• Loans to have 4 year tenor.
• 12 months moratorium on principal repayment.
• Interest to be capped.
• Interest rate 9.25% to 9.75% from banks
• Interest rate 14% from NBFCs.
• 100%  credit guarantee cover to banks and NBFCs on principal.
• Scheme can be availed till 31^st Oct, 2020.

• All businesses/MSMEs are eligible

         How to Apply ?

• Through Banks, DFS and National Credit Guarantee Trustee Company Ltd (NCGTC)

    2. Debt for Stressed MSMEs

• Rs. 20,000 crores subordinate Debt for stressed MSMEs
• Functioning MSMEs which are NPA or are stressed will be eligible
• Govt will provide a support of Rs. 4000 crore to CGTMSE
• CGTMSE will provide partial credit Guarantee support to Banks
• Promoters of the MSME will be given debt by banks, which will then be infused by promoter as equity in the unit.

  3. Equity Infusion For MSMEs 

•  Rs. 50,000 crores equity infusion for MSMEs through Fund of Funds
• Will provide equity funding for MSMEs with growth potential and viability
• Funds of fund will be operated through a Mother Fund and few daughter funds
• Will help to expand MSME size & capacity , encourage MSMEs to get listed on main board of Stock Exchanges.

           How to Apply?

• Through investor funds on boarded and registered with proposed Fund of funds

 4. New Definition of MSMEs

• Distinction between manufacturing and service sector to be eliminated
• Composite criteria: Annual Turnover and Investment for manufacturing & service sector
• Micro: Investment < Rs. 1 cr. and Turnover < Rs. 5 cr.
• Small: Investment < Rs. 10 cr. and Turnover < Rs. 50 cr.
• Medium: Investment < Rs. 50 cr. and Turnover < Rs. 250 cr.

5. Global Tenders to be disallowed upto Rs. 200 cr.

• Global Tenders will be disallowed in government procurement tenders upto Rs. 200 cr.
• This will be a step towards self-Reliant India and support Make In India.
• This will help MSMEs to increase their business.

Benefits of MSME and how to apply for MSME go to this link:

https://carahuldmittal.blogspot.com/2020/05/msme-and-its-eligibility-loan.html

Disclaimer:  This is meant purely for general education purpose.While the information is believed to be accurate to the best of my knowledge, I do not make any representations or warranties, express or implied, as to the accuracy or completeness of this information. Reader should conduct and rely upon their own examination and analysis and are advised to seek their own professional advice. This note is not an offer, invitation, advice or solicitation of any kind. I accept no responsibility for any errors it may contain, whether caused by negligence or otherwise or for any loss, howsoever caused or sustained, by the person who relies upon it.

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CA Rahul Mittal

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