New Delhi (NVI): In a big boost to the stressed MSME (Micro, Small & Medium Enterprises) sector, the Union Cabinet today approved the provision of Rs 20,000 crore as subordinate debt to provide equity support to medium enterprises, that will provide relief to around 2 lakh MSMEs amid the Covid-19 crisis.
Apart from this, the Cabinet has approved Rs 50,000 crore equity infusion for MSMEs through Fund of Funds (FoF). This will establish a framework to help MSMEs in capacity augmentation. This will also provide an opportunity to get listed in stock exchanges, the Government said in a statement after the meeting.
The scheme for Rs 3 lakh crore collateral-free automatic loans was earlier approved by CCEA and has been formally launched.
In another major development today, the government has further amended the definition of MSME. The turnover limit of medium enterprises has been revised upwards to Rs 250 crore, from Rs 100 crore announced earlier.
The Union Cabinet, chaired by Prime Minister Narendra Modi also announced a slew of measures to alleviate the distress in the farming sector due to the pandemic situation. The Government has approved MSP (Minimum Support Price) hike for 14 Kharif crops including paddy and cotton to provide instant relief to farmers.
The Minimum Support Price of paddy has been raised by Rs 53 per quintal taking the MSP to Rs 1,868 per quintal for 2020-21. The MSP of cotton has also been hiked now, up by Rs 260 to touch Rs 5,515 per quintal.
Apart from this, the Centre also launched a special micro-credit scheme, named ‘Pradhan Mantri Street Vendor’s AtmaNirbhar Nidhi’. The scheme is aimed to provide an affordable loan of up to Rs 10,000 to street vendors and it is likely to benefit 50 lakh street vendors in the urban and rural areas of the country.
The decisions were taken in line with the Atmnirbhar Bharat Abhiyan package announced by Prime Minister Narendra Modi on May 12, aimed at making India ‘ self-reliant’. Union Finance Minister Nirmala Sitharaman had announced the tranches of the 20 lakh crore package. PM Modi, in his address to the nation, had said that the economic stimulus will be 10 per cent of the country’s Gross Domestic Product (GDP).
The major decisions were taken by the cabinet even as the country enters the fifth phase of lockdown. This is also the first meeting of the PM Modi-led cabinet after the ruling NDA government completed the first year of its second term in office.
