In what would be dubbed as a Diwali gift for India’s Micro, Small and Medium Enterprises (MSMEs), the Modi government on Friday (2 November) announced 12 big reforms for the sector, as reported by BlueKraft Digital Foundation’s CEO Akhilesh Mishra.
Historic intervention by Prime Minister Modi to boost the MSME sector.12 ground breaking decisions taken. Remember, MSME sector accounts for more than 90% of India's companies. Generates jobs, which in turn raises income levels and flourishes the economic cycle. #ModiWithMSME— Akhilesh Mishra (@amishra77) November 2, 2018
As claimed by MIshra the MSME sector comprises of more than 90 per cent of Indian companies. Here are the 12 reforms announced by the Modi government.
- Approving loans in just 59 minutes, with a sealing cap of Rs 1 crore.
- Interest rate for GST registered MSME to be 2 per cent lower than the market rate, applicable for loans up to Rs 1 crore. Exporters to get 3 to 5 per cent subvention on loans.
- Companies having a turnover of over Rs 500 crore to compulsorily register on the TreDS platform. This would help the MSMEs supplying to these companies in case of a delayed payment.
- Government entities to make 25 per cent of all their purchases through MSMEs.
- Government entities would also have to get 3 per cent of their procurement done through MSMEs run and owned by women.
- All central government enterprises to be present on GeM portal helping MSMEs supply directly to them. This will also aid in eliminating the middleman culture.
- Twenty new hubs and 100 toll rooms to be created at the cost of Rs 6,000 crore to help technological up-gradation of MSMEs.
- Pharma companies to be part of clusters, which basically means enterprises being physically present in a small 5 km radius. The Central government would bear 70 per cent of all the expenses needed to form such clusters.
- Returns with regards to eight labour laws and 10 central government rules would only need to be filed once a year.
- A possible end to inspector raj as inspectors would be allocated the establishment digitally and they would also need to file reports within 48 hours with appropriate reasons.
- Air and water consents for MSMEs to now be merged together and routine environment inspections would also end.
- MSMEs would not have to face criminal action for small and inadvertent mistakes, resulting in a reduction of 60 per cent in total cases.