MSME-Micro, Small and Medium Enterprises:
- MSME stands for Micro, Small and Medium Enterprise. MSME or SSI enterprises are the foundation of any economy and are an engine of economic growth, advancing impartial improvement for all.
- MSME in India are governed by the MSMED Act 2006 and the subsequent circulars and notifications by the Government from time to time .
Share of MSMEs in India
The Micro,Small and Medium Enterprises occupies strategic importance in terms of output (about 45% of manufacturing output),exports(about 40% of the total exports) and employment (about 69 million person since over 29 million units through out the country).
Worldwide Trends in the SME Sector
Japan – SMEs employ 70% of the wage earners and contribute 55% of the value-added.
Thailand – SMEs employ 60.7% of the population while contributing 38% to the GDP.
China–SMEs contribute to over 68%of the exports–in the last 20 years created more SMEs than the total number of SMEs in Europe and the US combined.
The Importance and role of MSMEs in the Indian Economy:
– To Generate Large Scale Of Employment
– To sustain economic growth and increase exports
– Making Growth Inclusive -focus on people’s skills and Agency
Benefits available to MSME Enterprises:
– Credit prescription (Priority sector lending).
– Excise Exemption Scheme
– Exemption under Direct Tax Laws. – Statutory support
– Priority Lending
-Lower interest rates and availability and access to greater credit
-Capital and other grants for infrastructure development
-Reimbursement of ISO Certification
-Technology and quality up-gradation support to MSMEs
-Collateral free loans from banks
-Eligible for industrial promotion subsidy
-Concession in electricity bills
Recent Initiatives for MSMEs:
Economic Relief Package for “Aatmanirbhar Bharat Abhiyan” is available :
1.For Standard MSMEs:
Rs 3 lakh crore collateral-free automatic Pre-approved Loan for Businesses including MSMEs. This scheme can be availed till 31st Oct, 2020.
There will be no guarantee fees as well as no fresh collateral required.
2.For stressed MSMEs:
GoI has announced a Subordinated Debt of Rs. 20,000 crores.
The functioning of MSMEs which are NPA or are stressed would be eligible to avail this facility.
3.For MSME having potential and which are viable:
A fund of fund has been created to infuse equity of worth Rs 50,000 crore in MSME sector.
It will also encourage MSMEs to get listed on main board of Stock Exchanges.
4.E-market linkage has been provided to the MSMEs in order to enable them to access the markets.
5..New definition of MSMEs:
The definition of MSME has been revised by increasing the investment limit of MSME, introducing an additional criteria of turnover as well as removing the distinction between manufacturing and service sector MSME.
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