MSMEs get economic boost of Rs 3 lakh crore by government

The largest economic package by the government will be announced in different stages over the next few days. In today’s announcement, Finance Minister covered micro, small and medium enterprises (MSMEs), DISCOMS, contractors, EPF and the real estate sector. The MSME forms nearly 20 per cent to 30 per cent of total GDP.

Finance Minister Nirmala Sitharaman announced that MSME sector would get loans of up to Rs 3 lakh crore. These loans would have certain advantages without new collateral and guarantee but will be given to those companies, which have a turnover of up to Rs 100 crore. The tenure of these loans would be four years, along with 12-month moratorium on principal. The scheme will give loans till October 31, 2020. MSMEs are divided into three broad categories having standard, struggled and seeking for good growth. The stressed MSME would get Rs 20,000 crore benefit and Rs 50,000 crore for MSMEs, which have sustained the current storm. This is good for MSMEs and can also help their expansion plans to go smooth.

The government tenders of up to Rs 200 crore would not be the global tenders. This creates a higher window to MSMEs in grabbing more business opportunities as there will be no international players in the bidding process.

The focus on MSME sector would certainly help ground level consumption theme to continue, even after the lockdown period is over. Further, the government has taken this sector from all prospective such as providing them with required liquidity and also, giving business opportunities.