Prime Minister Narendra Modi announced 12 major decisions taken by his government for the Micro, Small and Medium Enterprises (MSMEs) at the launch event of the Union Government’s Support and Outreach Initiative on Friday, 2 November.
The 12 decisions, the PM said, are proof that the impact is huge when collective initiative is taken by breaking silos, collective decisions are taken and collective responsibility is carried out.
Among the decisions taken today is a compulsory requirement for companies with turnover of more than Rs 500 crore to join the Trade Receivables e-Discounting System.
The PM said that this will ensure that MSMEs don’t face trouble in cash flow.
“I dedicate 59 minute loan approval portal to you and it has started benefiting the MSMEs businessmen already,” the PM said adding that upto Rs 1 crore loan is being approved in just 59 minutes to entrepreneurs sitting at a corner of the country as he speaks.
At the event, the PM said that every GST registered MSME will get a 2 per cent discount in interest on new or incremental loans of upto Rs 1 crore.
“Now joining GST and paying taxes will be your strength,” he said.
PM Modi said that the government has decided to increase interest subvention on pre and post shipment credit from 3 per cent to 5 per cent.
Announcing the fourth decision, the PM said that the government companies will have to buy 25 per cent of its purchases from MSMEs. Previously, government companies used to procure 20 per cent of their purchases from MSMEs. The PM said that government companies made purchases of around Rs 1 lakh 14 thousand crore from various sources last year.
The PM also said that 3 per cent of the purchases are obtained from women entrepreneurs.
The Modi government also made it mandatory for all companies to register for GeM membership and all their vendors-MSMEs.
Modi said that his government will establish Tool Rooms across the country for technological upgradation.
Announcing a package of Rs 6,000 crore for the project, Modi said, “Twenty hubs will be built in the country and 100 spokes like Tool Rooms will be established.”
The government, the PM said, will spend 70 per cent on clusters for the Pharma companies in MSME sector so that they can do business smoothly and reach customers quickly.
In a major relief to the MSME sector, the PM announced that from now on returns under 8 labour laws and 10 central laws will have to be filed only once every year instead of the current two.
In a bid to make businesses transparent, Modi said that a Computerised Random Allotment will decide the deployment of an Inspector and he will have to file his report within 48 hours on the portal.
“An Inspector will not be able to go just anywhere randomly,” said the PM, adding, “This decision will help in freeing MSMEs from Inspector-raj.”
MSMEs will now have to obtain only one consent with regard to air and water pollution. The PM also said that only 10 per cent MSMEs will be inspected.
The PM said that his government has brought in an ordinance that simplifies the Company Law and bring relief to the MSMEs.
“These 12 decisions will make MSMEs stronger and help script a new chapter in this era of globalisation,” the PM said.
He said that he will himself inspect the work done by MSMEs in 100 districts of the country.
Speaking on the occasion the PM also expressed pride in India’s rise in the Ease of Doing Business ranking.
“It’s a matter of pride for us that India has taken a high jump of 23 ranks in Ease of Doing Business this time. Four years ago, when this government wasn’t in power, we were at 142nd position. Today we are at 77th rank and I believe that ‘top 50’ isn’t too far from our reach,” Modi said.