On Friday, Prime Minister Shri Narendra Modi announced a bunch of measures to be taken by the government which will help small and medium industries grow and nurture in the nation. The measures include a loan of up to INR 1 crore in 59 minutes, easier compliance with environmental laws of the state and the centre and relaxation in the labour laws.

The wholesome initiative is to perk up the job-generating sector and create employment opportunities in the country. Modi launched a 12 point ‘Support and Outreach Initiative’ for micro, small and medium enterprises. The government has been pressing the Reserve Bank of India to relax the non-performing loan guidelines for quite some time now.

Non-banking finance companies in India is hit by liquidity constraints and that is affecting the MSMEs extremely hard. This comes when the sector was already stimulating with the demonetisation effect as well the goods and services tax. Narendra Modi calls this step as a Diwali gift and claims to unveil a new era for India.

Under the scheme, the government will run an outreach program including some changes in the company laws for more than 100 days to boost the scheme to the entire country. The government of India aims to address the issue of the high cost of credit, non-availability of credit and access to the market with the initiative.

Any MSME firm is entitled to receive a loan of up to INR 1 crore in not more than 59 minutes through a new portal, Modi claims. GST registered firms can avail a 2 per cent subvention in the interest on an incremental loan of up to INR 1 crore. Earlier the interest subvention on pre and post shipment credit for exports has been raised to 5 per cent from 3 per cent.

Public sector companies and ventures are now required to buy at least a quarter of their requirement from micro, small and medium-sized enterprises. The same was 25 per cent earlier. Also to mention, the 3 per cent of the sources have to do from women-led firms and enterprises.

Government e-Marketplace (GeM) will onboard all central public sector companies to facilitate online procurement of goods and services by government organizations. Prime Minister Modi said that the government-run portal already has more than 1.5 lakh suppliers and 40,000 of them are MSMEs.

INR 6,000 crores are allocated for the scheme which will be used to set up 20 hubs and 100 tool rooms for upgrading the technology of medium and small-scale businesses. Special focus will be on the pharmaceutical industry. Any company with an annual turnover of more than INR 500 companies is bound to come on Trade Receivables e-Discounting System (TReDS) which will ensure efficient cash flow for MSMEs.

Random allotment via computers will sanction inspector visit to factories and the inspector has to upload all the reports on the portal within 48 hours of inspection. The same will ensure the end of ‘inspector raj’ and undemanded problems caused by bureaucrats.

Talking about the environment licences, MSMEs are now required to get a single air and water clearance to establish a factory or manufacturing unit. A single annual return on eight labour laws and 10 central rules will work. Minor offences under the Companies Act will be simplified through an ordinance.

In future, a mission will be launched under the scheme to ensure MSME employees benefits of Jan Dhan Accounts, insurance and provident funds.

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