Loans Up to Rs 1 Crore in 59 Minutes: PM Modi Announces Diwali Bonanza for MSMEsRs 1 Crore in 59 Minute: PM Modi Announces Diwali Bonanza for MSMEs

New Delhi: In a Diwali bonanza for small and medium businesses, Prime Minister Narendra Modi on Friday announced a 59-minute loan facility for up to Rs 1 crore for the sector.

Modi, who launched the Micro, Small and Medium Enterprises (MSME) support programme, said his government had come up with 12 policies to support the sector.

While GST-registered MSMEs will get 2 per cent subvention or rebate on incremental new loans of up to Rs 1 crore, he said, adding interest subvention on pre- and post-shipment credit for exports by MSMEs has been increased from 3 per cent to 5 per cent.

To rid the sector of inspector raj, Modi announced that inspections of factories in the sector will be sanctioned only through a computerised random allotment and inspectors will have to upload reports on portal within 48 hours. “No inspector can now go anywhere. He will be asked why he went to a factory,” he said.

Easing compliance with environmental rules, MSMEs will need single air and water clearance and just one consent to establish a factory. MSMEs will have to file just one annual return on eight labour laws and 10 central rules, he said, adding that an ordinance has been promulgated to simplify levy of penalties for minor offences under the Companies Act.

Calling the measures a “Diwali gift”, Modi said the move will help generate employment in the sector.

The outreach programme will run for 100 days covering 100 districts through the country.

Lauding the country’s jump on the Ease of Doing Business Rankings to the 77th place, Modi said India had done what people couldn’t imagine. He added that a “rank within top 50 is not far away”.

Public sector companies, which were mandated to source 20 per cent of their annual procurement from MSMEs, will now source at least a quarter of their requirement (25 per cent) from the sector, he said, adding 3 per cent of sourcing by PSUs would have to be done from MSMEs run by women.

Also, all central public sector enterprises will have to take membership of the Government e-Marketplace (GeM) to facilitate online procurement of common use goods and services by various government departments and organisations.

All companies with turnover of more than Rs 500 crore would have to now come on Trade Receivables e-Discounting System (TReDS) platform so that there is no cash flow problem for MSMEs.

The announcement comes as a counter to overtures to small businesses already made by the opposition Congress party. Congress leader Rahul Gandhi said in August he would seek to shift the focus of the country’s economic policy towards supporting small and medium-sized firms if the opposition won power in next year’s election.

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