Historic decisions for MSME sector, street vendors & farmers taken

Historic decisions for MSME sector, street vendors & farmers taken

Agency News

New Delhi, Jun 1 : Decisions that will have a transformative impact on the lives of India’s hard working farmers, MSME sector and those working as street vendors were taken at the first meeting of the Union cabinet, under the chairmanship of Prime Minister Narendra Modi, in the second year in office of the NDA in its second term.

In a significant decision taken for the benefit of the MSMEs Sector, the NDA Government laid down the road map for effective implementation of other announcements under the Atmanirbhar Bharat Package. These include Upward revision of MSME Definition that will help in attracting investments and creating more jobs in the MSME sector, approval of proposal for provisioning of Rs 20,000 crore as subordinate debt to provide equity support to the stressed MSMEs and a proposal for equity infusion of Rs. 50,000 crores for MSMEs through fund of funds.

The Cabinet decided for further upward revision of MSME definition. In the package announcement, the definition of micro manufacturing and services unit was increased to Rs. 1 crore of investment and Rs. 5 crore of turnover. The limit of the small unit was increased to Rs. 10 crore of investment and Rs 50 crore of turnover.

Similarly, the limit of a medium unit was increased to Rs 20 crore of investment and Rs. 100 crore of turnover. It may be noted that this revision was done after 14 years since the MSME Development Act came into existence in 2006. After the package announcement on 13th May, 2020, there were several representations that the announced revision is still not in tune with market and pricing conditions and it should be further revised upwards. Keeping in mind these representations, the Prime Minister decided to further increase the limit for medium manufacturing and service units. Now it will be Rs. 50 crore of investment and Rs. 250 crore of turnover.

It has also been decided that the turnover with respect to exports will not be counted in the limits of turnover for any category of MSME units whether micro, small or medium. The Cabinet also approved a scheme to provide loans to street vendors. Information and Broadcasting Minister Prakash Javadekar said that the Ministry of Housing and Urban Affairs has launched a Special Micro-Credit Facility Scheme - PM SANNidhi (PM िनिध ) - PM Street Vendor's AtmaNirbharNidhi, for providing affordable loans to street vendors.

This scheme will go a long way in enabling them to resume work and earn livelihoods. Over 50 lakh people, including vendors, hawkers, thelewale, rehri wala, theliphadwala etc. in different areas/ contexts are likely to benefit from this scheme. The goods supplied by them range from vegetables, fruits, ready-to-eat street foods, tea, pakodas, breads, eggs, textiles, apparel, footwear, artisan products, books/ stationary etc. The services include barber shops, cobblers, pan shops, laundry services etc. 'The Government of India is sensitive towards the problems they have faced in the wake of the COVID-19 crisis. In such a time, there is an urgent need to provide affordable credit to them to ensure their business gets a boost. KOLKATA, JUN 01 (UNI)- Ferry service at BabuGhat opens during lockdown in Kolkata on Monday.UNI PHOTO CAL9u UNIVARTA (News Agency) UNI-Urdu Service(News Agency) Newswrap Newswrap1 6/1/2020 PM chairs 1st Cabinet Meeting of 2nd year in office, Historic decisions for MSME sector, street vendors & farmers taken www.uniindia.com/pm-chairs-1st-cabinet-meeting-of-2nd-year-in-office-historic-decisions-for-msme-sector-street-vendors-farmers-taken/india/new… 2/3 Urban Local Bodies will play a pivotal role in the implementation of the scheme,'Javadekar said. This is for the first time in India’s history that street vendors from peri- urban/ rural areas have become beneficiaries of an urban livelihood programme. The vendors can avail a working capital loan of up to Rs. 10,000, which is repayable in monthly installments in the tenure of one year. On timely/ early repayment of the loan, an interest subsidy @ 7% per annum will be credited to the bank accounts of beneficiaries through Direct Benefit Transfer on six monthly basis. There will be no penalty on early repayment of loan. The scheme provides for escalation of the credit limit on timely/ early repayment of loans to help the vendor achieve his ambition of going up on the economic ladder. It is for the first time that MFIs/ NBFCs/ SHG Banks have been allowed in a scheme for the urban poor due to their ground level presence and proximity to the urban poor including the street vendors.

In line with the Government’s vision of leveraging technology to ensure effective delivery and transparency, a digital platform with web portal/ mobile app is being developed to administer the scheme with end-to-end solution. The IT platform will also help in integrating the vendors into the formal financial system. This platform will integrate the web portal/ mobile app with UdyamiMitra portal of SIDBI for credit management and PAiSA portal of MoHUA to administer interest subsidy automatically. The scheme incentivises digital transactions by the street vendors through monthly cash back. MoHUA in collaboration with State Governments, State Missions of DAY-NULM, ULBs, SIDBI, CGTMSE, NPCI and Digital Payment Aggregators will also launch a capacity building and financial literacy programme of all the stakeholders and IEC activities throughout the country during the month of June and loaning will commence in the month of July. The Cabinet also approved MSP For 14 kharif crops. The MSP has been announced, based on the recommendation of CACP.

The return over cost for these 14 crops ranges from 50% to 83%. The cabinet also decided to extend repayment date up to 31.08.2020 for all Short-Term loans up to Rs.3 lakh advanced for agriculture and allied activities by banks. Farmers will also get the benefit of interest subvention and prompt repayment incentive. The agricultural short-term loan due between March 1, 2020 and August 31, 2020 will continue to get a benefit of 2 per cent Interest Subvention (IS) to Banks and 3 per cent Prompt Repayment Incentive (PRI) to farmers. Government of India’s decision of providing such loans to farmers through banks @ 7 per cent per annum, with 2 per cent per annum interest subvention to banks and 3 per cent additional benefit on timely repayment by farmers thus provides loans upto Rs.3 lakh at 4 per cent per annum interest. Interest Subvention Scheme (ISS) was started to provide concessional short-term crop loans including loans availed through Kisan Credit Cards to the farmers. In the last few weeks, many farmers are not able to travel to bank branches for payment of their short-term crop loan dues. Hence the cabinet decision would help crores of farmers. The poor and vulnerable are at the top of the priorities of the Government led by the Prime Minister. During the Coronavirus pandemic, right from the day of announcement of the lockdown, the government has been sensitive to the needs of the poorest of the poor. This was seen in the announcement of the Pradhan MantriGaribKalyanYojana package on 26th of March 2020, within just two days of the start of lockdown. Massive reforms were announced for farmer welfare, freeing farmers from the chains that bound them and giving their income prospects a significant boost. Along with this, more investments into farm infrastructure were proposed. Allied activities such as fisheries too received a financial package. At every step, the Government of India has shown compassion and alacrity in serving the needs of the most vulnerable. (UNI)