PM Modi announces quick loans and relaxation of labor laws for MSMEs as Diwali gift

Prime Minister Narendra Modi on Friday announced the sanctioning of loans of up to Rs 1 crore in 59 minutes, relaxation of labor laws, easier compliance with environmental rules and changes in company law for small and medium-sized businesses companies as a “Diwali gift” to boost the sector, the country’s second largest employer.

Announcing a series of measures for the sector, he said GST registered micro, small and medium enterprises (MSMEs) will receive a loan in just 59 minutes through a new portal

In addition, GST-registered MSMEs will receive a 2% grant or subsidy on a new loan or additional loan of up to 1 crore rupees, Modi said, adding that the grant from interest on pre- and post-shipment credits for MSME exports has been increased. at 5 percent from 3 percent.

“Now the GST portal will ask MSMEs, do you need a loan? Now the government is proposing to provide loans to MSMEs. Now no one has to run from bank to bank. other to get loans. In the new India, no one should be forced to visit a bank branch repeatedly, ”he said.

Further, he said, “Honest taxpayers will benefit. GST registration and tax filing will become your strength. It will earn you a 2 percent interest bonus,” he said. -he declares.

To rid the sector of Inspector Raj, Modi announced that inspections of factories in the sector will only be sanctioned through computerized random assignment and that inspectors will have to upload the reports to the portal within 48 hours.

“No inspector can go anywhere now. He will be asked why he went to a factory. This is an important decision to end Inspector Raj,” he said. consent to the establishment of a factory.

MSMEs will have to file a single annual report on eight labor laws and 10 central rules, he said, adding that an ordinance has been enacted to simplify the imposition of penalties for minor infractions under the Labor Law. companies.

Modi called the 12 new measures “historic” that will make Diwali brighter for the sector and its millions of entrepreneurs and employees.

Observing that MSMEs play an important role in the economy, he said: “This is not only a Diwali gift for them, but it will herald a new era for them which will provide the most jobs after agriculture” . Public sector companies, which were mandated to source 20 percent of their annual purchases from MSMEs, will now source at least a quarter of their needs (25 percent) from the sector, he said. he said, adding 3 percent of the supply by

PSUs should be carried out from MSMEs headed by women.

In addition, all companies in the central public sector will need to become members of the Government e-Marketplace (GeM) to facilitate the online purchase of goods and services of common use by various government departments and organizations.

Modi announced Rs 6,000 crore for the creation of 20 hubs and 100 tool rooms for the technological upgrade.

Clusters for MSMEs in the pharmaceutical sector will be created to boost production in the sector, he said.

All companies with a turnover of over Rs 500 crore should now use the TReDS (Trade Receivables e-Discounting System) platform so that there is no cash flow problem for MSMEs.

Joining this portal will allow entrepreneurs to access bank credit, based on their upcoming receivables, he said, adding that it would solve their cash cycle problems.

“The important advantage of this would be that the cash flow problem of the sector would be solved … I would ask large companies to erase their invoice and make the payment without delay. If there is a problem, they can register their complaint on the portal. MSME Ministry Samadhan for the turnaround, ”he said.

Noting that MSMEs are one of the major job generators in India, he recalled the glorious Indian traditions of small-scale industry, including hosiery from Ludhiana and saris from Varanasi.

Speaking of India which rose 23 places in the World Bank’s latest Ease of Doing Business rankings, Modi said that in four years his government has achieved what many do not believe and what no other country did – dropping from 142nd place in 2014 to 77th position. Getting into the top 50 is not far off, he added.

Process reform will help MSMEs, Modi said.

The Prime Minister also mentioned social security for employees in the MSME sector. He said a mission will be launched to make sure they have Jan Dhan accounts, contingency fund and insurance.

“These decisions would go a long way in strengthening the MSME sector in India,” he said.

He said the implementation of this awareness program will be intensively monitored over the next 100 days.

Speaking on the occasion, Finance Minister Arun Jaitley said various measures taken by the government would benefit the SME sector.

The finance minister said that the government’s Mudra program has benefited more than 13 million people and has also helped create jobs. Speaking of the loan portal, Jaitley said that over 72,000 loan applications have been approved by the portal.

“We just started the portal two weeks ago and around 70,000 loan applications have been approved,” he said.

MSME Minister Giriraj Singh said there are 6.5 crore of units which provide jobs for around 12 crore of people. The mandatory procurement standard for CPSEs has benefited around 90,000 MSMEs, he said.