New Delhi, Nov 2:
Prime Minister Narendra Modi on Friday announced a 59-minute loan facility of up to Rs 1 crore for small and medium businesses. Launching the MSME support programme, PM Modi said his government has finalised 12 policies to boost the sector. Calling it a “Diwali gift”, the prime minister said these policies would enhance credit access to micro, small and medium businesses. The move will give a boost to the micro, small and medium enterprises sector and help generate employment. PM Modi also stated that, “12 new historical decisions have been taken for the small industries which are like a Diwali gift for the sector.” The 59-minute loan facility is one of the key decisions. Also, GST-registered MSMEs will get 2 per cent interest subvention or rebate on incremental loan of up to Rs 1 crore, PM Modi said. Interest subvention on pre and post shipment credit for exports by MSMEs has been increased from 3 per cent to 5 per cent, he added. He further said that “India has become an economic powerhouse due to the MSME sector.” The outreach programme will run for 100 days covering 100 districts throughout the country. 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. A major obstacle for growth of MSMEs is their inability to access timely and adequate finance as most of them are in niche segments where credit appraisal is a major challenge. As per the RBI’s Mint Street Memo report, note ban imposed in November 2016 has led to further decline in the already falling credit to the MSME sector, while GST roll out has not made any significant positive impact on overall credit to the sector but has deeply dented their exports. About 97 per cent of MSMEs operate in the informal sector. Commenting on World Bank’s latest ‘Ease of Doing Business’ ranking, PM Modi said in four years his government has achieved what many did not believe and achieved what no other nation in the world has done – leaping from 142 rank in 2014 to 77th rank.
Breaking into top 50 rank is not far away, he added.
