MSME: Union Ministers Prakash Javadekar, Nitin Gadkari and Narendra Singh Tomar addressed the media on the decisions made at Cabinet dated 1st day of June, 2020. Key highlights of Press briefing are –
Cabinet approves revision in definition of MSME
- Cabinet approves Rs 20,000 crore distressed assets fund for MSME
- The scheme provides debt facility of up to 15 percent of the promoter contribution or Rs 75 lakh to the promoters.
- Union Cabinet clears new definition of MSME, limit raised to Rs 250 crore
New Definitions for MSME Enterprises:
| Micro enterprises | Enterprises with Rs 1 crore investment and Rs 5 crore turnover would now qualify as micro enterprises |
| Small enterprises | Businesses with an investment of less than Rs 10 crore and turnover less than Rs. 50 crore will now be classified as small enterprises |
| Medium enterprises | The definition for medium enterprises has been revised upwards to an investment of Rs 50 crore and a turnover of Rs 250 crore. |
- Rs 50,000 crore equity investment assistance for MSME
- Cabinet clears a credit scheme for street vendors. Scheme for street vendors is called PM SVANIDHI
Other Initiatives
- Farmers will get time till August 31 to repay their loans, and those who clear their dues can avail loans at a 4 percent interest rate.
- Norms for loans to farmers under Kisan credit card scheme have been eased.
- Cabinet approves hike in minimum support price (MSP) for 14 crops. Farmers will get 50-83 percent more than the cost for kharif crops.
The author of the above article is CS Lalit Rajput, Partner at Xcede Consultech LLP.
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