The Prime Minister, Shri Narendra
Modi, 2 November 2018 launched a
historic support and outreach programme for the Micro, Small and Medium
Enterprises (MSME) sector. As part of this programme, the Prime Minister
unveiled 12 key initiatives which will help the growth, expansion and
facilitation of MSMEs across the country.
Saying that MSMEs are one of the principal
employment generators in India, he said he is announcing today, will mark a new
chapter for the MSME sector.
Indeed, it does.
The Prime Minister said that the
success of economic reforms launched by the Union Government, can be gauged
from the rise in India's “Ease of Doing Business Rankings,” from 142 to 77 in
ago, we were at 142th position. Today we are at 77th rank & I believe that
"top 50" isn't too far from our reach," said Modi.
The Prime Minister said that there
are five key aspects for facilitating the MSME sector. These include access to
credit, access to market, technology upgradation, ease of doing business, and a
sense of security for employees. He said that as a Diwali gift for the sector,
the 12 announcements he is making, will address each of these five
The major significant
takeaways from his speech.
Access to Credit
59 minute loan portal
enables the MSMEs to get in-principle approval for loans upto Rs 1 crore.
Explaining the advantage of this portal, he said in New India no one should be
compelled to visit a bank branch repeatedly.
The Prime Minister mentioned the
second announcement as a 2 percent interest subvention for all GST registered
MSMEs, on fresh or incremental loans. For exporters who receive loans in the
pre-shipment and post-shipment period, the Prime Minister announced an increase
in interest rebate from 3 percent to 5 percent.
The third announcement made by the
Prime Minister was that all companies with a turnover more than Rs. 500 crore,
must now compulsorily be brought on the Trade Receivables e-Discounting System
(TReDS). He said that joining this portal will enable entrepreneurs to access
credit from banks, based on their upcoming receivables. This will resolve their
problems of cash cycle.
Access to Markets
He made his fourth announcement that public
sector companies have now been asked to compulsorily procure 25 percent,
instead of 20 percent of their total purchases, from MSMEs.
His fifth announcement was that out
of the 25 percent procurement mandated from MSMEs, 3 percent must now be
reserved for women entrepreneurs.
His sixth announcement is that
all public sector undertakings of the Union Government must now compulsorily be
a part of GeM. He said they should also get all their vendors registered on
Coming to technological upgradation,
the Prime Minister said that tool rooms across the country are a vital part of
product design. His seventh announcement was that 20 hubs will be formed across
the country, and 100 spokes in the form of tool rooms will be
Ease of Doing Business
His eighth announcement is related to
pharma companies. He said clusters will be formed of pharma MSMEs. He said 70
percent cost of establishing these clusters will be borne by the Union
His ninth announcement is on
simplification of government procedures. He said is that the return under 8 labour laws and 10
Union regulations must now be filed only once a year.
His tenth one is that now the
establishments to be visited by an Inspector will be decided through a
computerised random allotment.
His eleventh announcement is that
under air pollution and water pollution laws, now both these have been merged
as a single consent. He further said that the return will be accepted through
As the twelfth announcement, the
Prime Minister mentioned that an Ordinance has been brought, under which, for
minor violations under the Companies Act, the entrepreneur will no longer have
to approach the Courts, but can correct them through simple procedures.
Social Security for MSME
The Prime Minister also spoke of
social security for the MSME sector employees. He said that a mission will be
launched to ensure that they have Jan Dhan Accounts, provident fund and
The Prime Minister said that these
decisions would go a long way in strengthening the MSME sector in India. He
said the implementation of this outreach programme will be intensively
monitored over the next 100 days.