The Prime Minister, Shri Narendra Modi, on 2nd November 2018,launched a support and outreach programme for the Micro, Small and Medium Enterprises (MSME) sector. The Prime Minister unveiled12 key initiatives which will help in the growth, expansion and facilitation of MSMEs across the country:
- Loans upto 1 crore within 59 minutes through an online portal.
- Interest subvention of 2% for all GST registered MSMEs on fresh or incremental loans.
- All companies with a turnover of more than 500 crores to be mandatorily on TReDS platform to enable entrepreneurs to access credit from banks, based on their upcoming receivables, thus, solving the problems of cash cycle.
- All PSUs to compulsorily procure 25 percent from MSMEs instead of 20 percent of their total purchases.
- Out of the 25 percent procurement mandated from MSMEs, 3 percent reserved for women entrepreneurs.
- All CPSUs to compulsorily procure through GeM portal.
- 100 Technology Centres to be established at the cost of Rs 6000 crore.
- Govt. of India to bear 70 percent of the cost for establishing Pharma clusters.
- Returns under 8 labour laws and 10 Union regulations to be filed once in a year.
10) Establishments to be visited by an Inspector will be decided through a computerised random allotment.
11) Single consent under air and water pollution laws. Returns will be accepted through self-certification and only 10 percent MSME units to be inspected.
12) For minor violations under the Companies Act, entrepreneurs no longer have to approach court but can correct them through simple procedures.
The Prime Minister said that there are five key aspects for facilitating the MSME sector:
· access to credit
· access to market
· technology upgradation
· ease of doing business
· sense of security for employees.
BUDGET THRUST TO THE MSME SECTOR
Micro, Small and Medium Enterprises (MSME) sector has emerged as a highly vibrant and dynamic sector of the Indian economy over the last five decades. MSMEs play a crucial role in providing employment opportunities. MSMEs are complementary to big industries and contribute greatly to the socio-economic development of the country. Keeping this in mind andthe growing role and contribution of the MSME sectorin boosting employment and economic growth, the Union Budget, presented by the Finance Minister on 1stFebruary 2018 in the Parliamenthas given the sector a big thrust by enhancing the budgetary allocation from Rs. 6481.96 crore in 2017-18 to Rs.6552.61 crore in 2018-19.
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- The allocation for individual Schemes (apart from CGTMSE) has gone up by 59%, from Rs.3680 crore in 2017-18 to Rs. 5852.61 crore in 2018-19.
· The allocation for National Manufacturing Competitiveness Program has gone up from Rs. 506 crore in 2017-18 to Rs. 1006 crore in 2018-19. This scheme will help technology up-gradation in the MSME sector.
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- Allocation under Prime Minister Employment Generation Programme has gone up from Rs. 1024.49 crore in BE 2017-18 to Rs. 1,800 crore in BE 2018-19 for generating self employment opportunities through establishment of about 88,000 micro enterprises in the non-farm sector and providing employment to around 7 lakh people.
· The Credit Guarantee Fund has already been enhanced from Rs.2500 crore to Rs. 7500 crore. This enhancement along with other structural reforms in the Scheme is aimed at boosting credit growth and employment generation in the MSE sector in a big way.
· There has been more than a threefold increase in the allocation for setting up of the state-of-the-art Technology Centres from Rs.150 crore in BE 2017-18 to Rs. 550 crore in BE 2018-19.
· Allocation under Khadi Grant has been enhanced significantly from Rs.265.10 crore in BE 2017-18 to Rs. 415 crore in BE 2018-19.
· Under Scheme for Fund for Regeneration of Traditional Industries (SFURTI), the budgetary allocation has increased from Rs.10 crore in BE 2017-18 to Rs. 125 crore in BE 2018-19. This will give an unprecedented boost to employment generation in the traditional and rural industries.
· The allocation under ASPIRE (A Scheme for Promotion of Innovation, Rural Industry and Entrepreneurship) has been raised from Rs. 50 crore in BE 2017-18 to Rs. 232 crore in BE 2018-19 with an aim to set up 100 livelihood business incubators and 20 technology business incubators. This will accelerate entrepreneurship and employment generation.
· The allocation for National SC/ST Hub has been raised from Rs. 60 crore to Rs 93.96 crore with a view to giving an impetus to the growth of the business of SC/ST entrepreneurs. The overall allocations for the north-eastern region, for SC/ST components under various schemes have also witnessed significant increase.
Other schemes that will give a boost to the MSME sector are:
- Extension of reduced rate of 25 percent available at present for companies with turnover of less than 50 crore to companies reporting turnover up to Rs. 250 crore in Financial Year 2016-17.
- Contribution of 8.33% of Employee Provident Fund (EPF) for new employees bythe Government for three years.
- Contribution of 12% to EPF for new employees for three years by the Government in sectors employing large number of people like textile, leather and footwear.
