The empowering of the Micro, Small, and Medium Enterprise sectors will propel India's aim towards a self-reliant country. It is since the sector is a contributor to the country's GDP. Exclusion of the foreign entities will then strengthen the representation of the Micro, Small, and Medium Enterprise units in the domestic landscape. Hence the first task is meant to ensure that these units survive the economic chaos that is continuing. Under the package, 6 relief measures out of the 15 measures which were declared and dedicated to the empowerment of the MSME or Micro, Small and Medium Enterprises or MSMEs sector. Let us check out these Micro Small and Medium Enterprises benefits announced. They also explained how they can push them to the path of self-reliance:
 

Much needed steps for the MSMEs

1. THE REVISED DEFINITION OF MSMES

The MSME definition is changed to accommodate the manufacturing and services in the same metric. Previously the aforementioned used to be two different categories that acquire their status through the amount of investments. This metric has also been changed. Now the 'turnover' of the units will be considered as an active metric to define the MSMEs units. According to the new definition, a unit having an investment of up to Rs 1 crore and turnover of Rs 5 crores will be termed as a micro-unit. A unit having an investment of up to Rs 10 crores and a turnover of Rs 50 crore will be termed as a small unit. An enterprise can be classified as a medium unit having an investment of up to Rs. 20 crores and also having turnover of Rs 100 crore.

 

2. 3 LAKH CRORE CREDIT to GUARANTEE THE SCHEME

The government has provided a sum of total Rs. 3 lakh crore to offer the collateral-free loans to the MSMEs. Under this, the MSMEs with an outstanding credit up to Rs. 25 crores and also turnover up to Rs. 100 crores can easily borrow 20% of their total pending credit amount till 29th February 2020. The principal repayment moratorium for these kinds of loans is decided to 12 months and a total tenure of 4 years accompanies the loan amount. Hence, the government will act as the guarantor. No guarantee fee will be charged for this.

 

3. RS. 50000 CRORE CORPUS

The representation of the MSMEs on stock exchanges can basically sustain them through the involvement of the equities. The government aims to achieve this thing by infusing equities in the MSMEs through funds. So, the government will set up the principal fund with Rs. 10,000 crore. It will be further expanded to a corpus of Rs. 50,000. This main fund will be therefore linked to the other funds named as daughter funds. Promising the MSMEs can generate the equities through these daughter funds.

 

4. RELIEF TO the MSMES WITH NPAS

There are about 2 lakhs of MSMEs which are involved in possessing the non-performing assets or shortly known as NPAs. These are hard hit by the economic downturn. The government has allotted Rs. 2000 crores in the subordinated debit form to aid these entities. The MSME units can also infuse the money delivered in equities form in their business. The lending institutions will receive a total of Rs. 4000 crores by the Credit Guarantee Fund Trust for the Micro and Small Enterprises or CGTMSE as a partial guarantee for the sum which is lent.

 

5. RELEASE OF PAYMENTS

The government has planned to release the pending payments of the MSME sectors. This will definitely help to sustain since the entities are already facing a nearly of 92% drop in their domestic sales and a 100% drop in exports compared to last year. So the plans of setting a fund of Rs. 1 trillion are on the way. The pending payment to the MSMEs will be facilitated with this fund.

 

6. RESTRICTING THE INVOLVEMENT OF FOREIGN COMPANIES

While India never had a shortage of tenders to file, most of the MSMEs faced tough competition from big foreign companies leading to an unfair disadvantage for the local MSMEs. Hence the government has banned the global tenders for government projects up to Rs. 200 crores. This is seen as a boost to the earlier initiative named as 'Make in India' being focused on increasing the number of the Indian products in the market.