In line with the Government’s focus on energising MSMEs in the country, the Union Cabinet Committee on Economic Affairs (CCEA) at a special meeting convened under the Chairmanship of Hon’ble Prime Minister Shri Narendra Modi, has approved Upward revision of MSME definition and modalities/ road map for implementing remaining two Packages for MSMEs viz., Rs 20000 crore package for Distressed MSMEs and Rs 50,000 crore equity infusion through Fund of Funds Fully paved way for Energising the MSME Sector through entire gamut of ‘Atmanirbhar Bharat Package’.
SRTEPC Chairman Shri Ronak Rughani has congratulated Hon’ble Prime Minister Shri Narendra Modi, Shri Nitin Jairam Gadkari, Hon’ble Union Minister of Micro, Small, & Medium Enterprises and Smt. Smriti Zubin Irani, Hon’ble Textile Minister for increasing the threshold of the MSMEs to Rs. 250 crores and implementation of the much-needed packages for equity infusion through Fund of Funds in the distressed MSME segment.
SRTEPC Chairman Shri Ronak Rughani informed that the MSMEs are the backbone of the Indian economy and are the driving force behind employment to crores of people with around 30% contribution to India’s GDP, 48% in our total exports. Revision of the MSME Definition after 14 years is a landmark step towards encouraging the MSME segment to expand their horizons, strengthen them to be a bigger contributor to the economy and boost exports. This important step will also make the country to be more self-sufficient in line with the Government’s initiative of Aatma Nirbhar Bharat Abhiyan, SRTEPC Chairman Shri Ronak Rughani added.
SRTEPC Chairman Shri Ronak Rughani further mentioned that Manmade Fibre Textile industry would be the major beneficiary as most of the textile units are under MSME. The revised limits of MSME, approval of Subordinate Debt Rs. 20000 Cr and Equity infusion of Rs. 50000 Cr will benefit most of the MSME textile units and our global competitiveness will improve & the exports of Manmade Fibre Textiles will increase. Higher threshold will include more units now and will give a huge fillip to the production, domestic supply and exports of Manmade fibres textiles .
Some of the salient features of the Package announced by the Cabinet include:
• 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 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 is decided to further increase the limit for medium manufacturing and service units 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.
• Approval for provisioning of Rs 20,000 crore as subordinate debt to provide equity support to the stressed MSMEs. This is likely to benefit 2 lakh stressed MSMEs.
• Approval for equity infusion of Rs. 50,000 crore 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.
• Implementation Modalities and Road Map for entire components of the Atmnirbhar Bharat Abhiyan package are in place. This will help in attracting investments and creating more jobs in the MSME sector.
• Rupees Three lakh crore collateral-free automatic loans for MSMEs to meet operational liabilities, buy raw material and restart businesses.
• Revision of MSME definition to render maximum benefits to the sector;
• Disallowing global tenders in procurements uptoRs. 200 crores- to create more opportunities for domestic players.
• And clearing of MSME dues by the Government and Public Sector Units within 45 days.