How is the Centre Enhancing Growth for the MSME Sector?
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Synopsis
The Centre's new initiatives for MSMEs aim to revolutionize access to finance and technology, ensuring timely payments and supporting growth. Explore how these measures are set to transform the landscape for small businesses across India.
Key Takeaways
- Credit Guarantee Scheme enhances access to credit for MSEs.
- PM Vishwakarma scheme supports traditional artisans.
- SAMADHAAN Portal ensures timely payment resolutions.
- Self-Reliant India Fund injects significant equity into MSMEs.
- TReDS improves liquidity for MSMEs by facilitating payments.
New Delhi, Dec 1 (NationPress) The Centre has launched a series of initiatives aimed at facilitating Micro, Small and Medium Enterprises (MSMEs) in accessing financing, ensuring prompt payments, and accelerating technology adoption, as revealed in a recent parliamentary session.
Among these initiatives is the Credit Guarantee Scheme (CGS) for Micro and Small Enterprises (MSEs), which has seen an infusion of an additional corpus fund of Rs. 9,000 crore to enable an extra credit of Rs. 2 lakh crore at a lower interest rate. Additionally, the guarantee ceiling for MSEs has been raised from Rs 5 crore to Rs 10 crore, effective April 1 of this year, providing guarantee coverage of up to 90% across various loan categories.
The Prime Minister's Employment Generation Programme offers a margin money subsidy of up to 35% for establishing new micro enterprises in the non-farm sector, with a project cost limit of Rs 50 lakh for manufacturing and Rs 20 lakh for service enterprises.
The PM Vishwakarma scheme extends comprehensive support to artisans and craftspeople engaged in 18 traditional trades, offering loans up to Rs. 3 lakh with an interest subsidy of up to 8%.
Additionally, a Self-Reliant India (SRI) Fund has been established, injecting Rs. 50,000 crore in equity funding into MSMEs, comprising Rs 10,000 crore from the Centre and Rs 40,000 crore sourced from Private Equity and Venture Capital Funds.
To ensure timely payment resolutions for MSEs nationwide, the Ministry of MSME has introduced the SAMADHAAN Portal to track outstanding dues owed to MSEs. So far, 161 Micro & Small Enterprises Facilitation Councils (MSEFCs) have been established across various States/UTs. The ministry has also launched the Online Dispute Resolution (ODR) Portal on June 27 this year to provide a digitized solution for delayed payment issues.
The Reserve Bank of India (RBI) has released guidelines for the setup and operation of the Trade Receivables Discounting System (TReDS), designed to facilitate financing for the trade receivables of MSMEs from corporate clients and other buyers, including government departments and public sector undertakings (PSUs), through a network of multiple financiers electronically. Currently, five entities are actively operating TReDS, with the monetary limit for onboarding reduced to a corporate turnover of Rs. 250 crore.
To promote technological advancement within the MSME sector, the MSME Ministry is executing several initiatives, including the MSE-Cluster Development Programme (Common Facility Centres), Tool Rooms/Technology Centres, MSE - Green Investment Financing for Transformation (GIFT) Scheme, and the MSME Champions Scheme.
Point of View
I believe that the Centre's renewed focus on MSMEs is a significant step towards economic resilience. These initiatives not only demonstrate a commitment to supporting small businesses but also reflect a broader strategy to enhance India's economic framework, ensuring that every enterprise has the opportunity to thrive.
NationPress
01/12/2025
Frequently Asked Questions
What is the Credit Guarantee Scheme?
The Credit Guarantee Scheme is designed to enhance the creditworthiness of Micro and Small Enterprises (MSEs) by providing guarantees on loans, thereby enabling them to access additional credit at reduced costs.
How does the PM Vishwakarma scheme support artisans?
The PM Vishwakarma scheme provides comprehensive support, including loans up to Rs. 3 lakh with interest subsidies, aimed specifically at artisans and craftspeople engaged in traditional trades.
What initiatives has the Ministry of MSME launched?
The Ministry has launched several initiatives, including the SAMADHAAN Portal for tracking dues, the Online Dispute Resolution Portal for payment issues, and technology upgradation schemes to support MSMEs.
What is the purpose of the Self-Reliant India Fund?
The Self-Reliant India Fund aims to inject equity funding into MSMEs, promoting growth and development through a significant financial boost from both the Centre and private investors.
How can MSMEs benefit from TReDS?
TReDS facilitates the financing of trade receivables, allowing MSMEs to receive payments faster from corporate clients and other buyers, thus improving their liquidity.
