Businesses/MSMEs have been badly hit due to COVID19 need additional funding to meet operational liabilities built up, buy raw material and restart business
- Decision: Emergency Credit Line to Businesses/MSMEs from Banks and NBFCs up to 20% of entire outstanding credit as on 29.2.2020
- Borrowers with up to Rs. 25 crore outstanding and Rs. 100 crore turnover eligible
- Loans to have 4 year tenor with a moratorium of 12 months on Principal repayment
- Interest to be capped
- 100% credit guarantee cover to Banks and NBFCs on principal and interest
- Scheme can be availed till 31stOct 2020
- No guarantee fee, no fresh collateral
Rs 20,000 crores Subordinate Debt for Stressed MSMEs
- Stressed MSMEs need equity support
- GoI will facilitate provision of 20,000 cr as subordinate debt
- Two lakh MSMEs are likely to benefit
- Functioning MSMEs which are NPA or are stressed will be eligible
- will provide a support of Rs. 4,000 Cr. to CGTMSE
- CGTMSE will provide partial Credit Guarantee support toBanks
- Promoters of the MSME will be given debt by banks, which will then be infused by the promoter as equity in the Unit.
Rs 50,000 cr. Equity infusion for MSMEs through Fund of Funds
- MSMEs face severe shortage of Equity.
- Fund of Funds with Corpus of Rs 10,000 crores will be set up.
- Will provide equity funding for MSMEs with growthpotential and viability.
- FoF will be operated through a Mother Fund and few daughter funds
- Fund structure will help leverage Rs 50,000 cr of funds at daughter funds level
- Will help to expand MSME size as well as capacity.
- Will encourage MSMEs to get listed on main board of Stock
WHY SHOULD I APPLY & WHAT BENEFITS I CAN GET?
1. Credit Facilities without Collateral (Schemes discussed below)
2. Capital Subsidies for various manufacturing and service sector units
3. Incentives for various manufacturing and service sector units
4. 1 % Interest Reduction on Overdraft Loans and other loans
5. Startup India Scheme for Innovative Companies - 3 out of 10 Years - No Income Tax to be paid - Allowed as Deduction - Companies up to 10 Years in Existence are still considered Startup - This is Free
6. Generator Subsidy
7. Concessions on Electricity Bills
8. Subsidy on Patent Registration and few Trademarks
9. ISO Certification Charges Reimbursement
10. MDA Scheme for Registration for Bar Coding
11. Special Incentives for Companies Manufacturing COVID-19 Products like - COVID Testing Kits, Sanitizers (Alcohol Based), Ventilators, PPE Kits, 3Ply Surgical Masks, KN95 Masks/ N95 Masks, Hospital Mattresses & Pillows, Multipara Monitors, Medical Oxygen
12. Allows credit for minimum alternate tax (MAT) to be carried forward for up to 15 years instead of 10 years
13. There are many government tenders which are only open to the MSME Industries
14. Business registered under MSME is given higher preference for government license and certification.
15. Support if you are starting an Incubation Center.
16. Incentives for Employment Generation.
What are the activities specifically excluded from coverage under MSME?
A. Ministry of Micro, Small and Medium Enterprises (MSME) has clarified as per notification S.O 2576 (E) dated 18.09.2015 and subsequent notification no S.O 85(E) dated 10.1.2017, activities that would be specifically not included in the manufacturing or production of commodities or rendering of services as per Section 7 of the said Act.
1. Forest and Logging
2. Fishing and aquaculture
3. Wholesale, retail trade and repair of motor vehicle and motorcycles
4. Wholesale trade except for motor vehicles and motorcycles.
5. Retail Trade Except of Motor Vehicles and motor cycles
6. Activities of households as employees for domestic personnel
7. Undifferentiated goods and services producing activities of private households for own
8. Activities of extraterritorial organisations and bodies Exchanges.