New Delhi: Finance Minister Nirmala Sitharaman on Wednesday (May 13) announced Rs 3 lakh crore bailout package for the Micro Small And Medium Enterprises (MSMEs). The move will benefit about 45 lakh MSMEs across the country amid the distressing circumstances due to coronavirus pandemic.
In order to re-boot the SMEs, the Centre has changed the definition of MSME bringing in companies with investment of up to Rs 1 crore and turnover of Rs 5 crore under the ambit of micro-companies.
With Rs 50,000 crore equity infusion into MSMEs through funds-of-funds, the move will help the small companies to widen its scale besides enjoying the benefits for MSMEs.
Besides this, an attempt has been made to improve the cash flows for these companies. The companies will be provided a 12-month moratorium on loan repayment with an assurance of 100 per cent credit guarantee cover by the government, if any MSME fails to repay the loan.
Notably, the MSMEs with Rs 25 crore outstanding amount and Rs 100 crore turnover are now eligible for collateral-free automatic loans for up to Rs 3 lakh crore.
Meanwhile, the government’s Rs 20 lakh crore package is focused to empower the local brands as a strategy to uplift the economy. “The Atmanirbhar Bharat Mission is not an attempt to isolate India but it talks about a confident India which can rest on its strengths and be able to contribute to the world,” the Union Minister said.
The scheme can be availed by MSMEs till October 31, she added.