During the Covid-19 Lockdown period, the MSME sector suffered a lot. Many enterprises have been bankrupted and most of the business has completely shut down. Lots of people have lost their jobs during this pandemic.
MSME sector is considered as a backbone of the Indian economy as it shares a huge contribution over 45% of organizational jobs, 95% of the Industrial units, and 50% of the Indian export. Almost 60% of the GDP Comes with these sectors.
In order to protect these sectors from the covid widespread government of India has taken lots of steps which provide relief to the MSMEs. One of them is the Atmanirbhar Bharat scheme which means self-reliance. This scheme is generally launched by the Indian government with the aim to make the Indian self-sufficient and don’t be dependent on another’s.
Measures were taken by Government to safeguard MSME Sector
Following measures taken by the government to provide relief to the
1. Changed Definition of MSME
For safeguarding the Micro Medium Small Enterprises (MSME) sector, the government has revised the definition of entities to fall under the MSME.
- Investment of more than Rs 1 crore in plant and machinery and an annual turnover of more than Rs 5 crore will be considered as micro enterprises.
- Investment of more than Rs 10 crore in plant and machinery and an annual turnover of more than Rs 50 crore will be considered as small enterprises.
- Investment of more than Rs 50 crore in plant and machinery and an annual turnover of more than Rs 250 crore will be considered as micro enterprises.
2. Credit Guarantee Scheme (CGS) of RS 3 Lakhs Crore
The Indian government has a motto to provide collateral free loans up to Rs 3 Lakhs crore to these micro small & medium-sized enterprises. The loan will be provided by the government bank for a period of 12 months for 4 years to repay back the loan.
3. Funds of Rs 50,000 Crore
The government will distribute Rs 10,000 crore of funds among these MSME sectors and later expand it to the Rs 50,000 crore. This will be further divided into small parts known as the daughter funds. This funds will help the MSME as a fuel to start the engine.
4. Payment fulfillment
The government has planned to release the payments pending with the MSMEs through the covid funds. This will help them to expand or restart their business at the time of the covid-19 crises.
5. Foreign companies restriction
The government has restricted the entries of foreign companies in the government tenders to promote and protect the MSME sector from the situation of covid pandemic. There are government projects pending of Rs 200 crores which will help in protecting the interest of these sectors.
There are lots of benefits that come with the msme registration which newly registered people can get. Some of the highlighted benefits are mentioned below.
- 100% collateral free bank loans.
- Subsidy will be provided on patent and barcode registration, bank loan interest rate, etc.
- Protections against the delayed and default payments.
- Concession on water and electricity bill payments.
- Priority on government tenders.
- ISO certification reimbursements.
Conclusion
There are lots of measures taken by governments in order to take out these sectors from the covid-19 pandemic. As it is the backbone of our country’s economy and proven as the faster growing sector in India. It has also had a huge contribution to the Indian GDP. So the government wants to maintain the economic balance to make our economy better and to continue its economic growth.