Cabinet revises MSME definition, announces 'affordable' loans for street vendors, better prices to farmers
New Delhi/IBNS: In a big boost to the Micro, Small and Medium Enterprises, the Union Cabinet chaired by Prime Minister Narendra Modi, on Monday cleared a Rs 20,000-crore debt scheme, which is expected to help nearly 2 lakh MSMEs raise funds following the anti-coronavirus lockdown.
The Cabinet cleared a proposal for equity infusion of Rs. 50,000 crores for MSMEs.
"This will establish a framework to help MSMEs in managing the debt-equity ratio and in their capacity augmentation. This will also provide an opportunity to get listed in stock exchanges," the Cabinet said a statement
The Centre on Monday decided for further upward revision of MSME definition. In the package announcement, the definition of micro manufacturing and services unit was increased to Rs. 1 crore of investment and Rs. 5 crore of turnover.
The limit of small unit was increased to Rs. 10 crore of investment and Rs 50 crore of turnover. Similarly, the limit of a medium unit was increased to Rs 20 crore of investment and Rs. 100 crore of turnover.
Besides, the government also launched a Special Micro-Credit Facility Scheme - PM SVANidh for providing affordable loans to street vendors.
Over 50 lakh people, including vendors, hawkers, thelewalas, rehriwala, theliphadwala etc. in different areas/ contexts are likely to benefit from this scheme, the Cabinet statement claimed.
The vendors can avail a working capital loan of up to Rs. 10,000, which is repayable in monthly instalments in the tenure of one year.
On timely/ early repayment of the loan, an interest subsidy of 7% per annum will be credited to the bank accounts of beneficiaries through Direct Benefit Transfer on six monthly basis. There will be no penalty on early repayment of loan.
Announcement for farmers':
For the Kharif season 2020-21, the government has fixed the Minimum Support Price (MSP) at a level of at least 1.5 times of the cost of production.
"Today, the MSP of 14 crops for the Kharif season 2020-21 has been announced, based on the recommendation of CACP. The return over cost for theses 14 crops ranges from 50% to 83%," the statement said.
The Centre also decided to extend repayment date up to Aug 31, 2020 for all Short-Term loans up to Rs.3 lakh advanced for agriculture and allied activities by banks.
Farmers will also get benefit of interest subvention and prompt repayment incentive.
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