Will present fairness help to MSMEs: Nitin Gadkari

Posted On Jun 26, 2020 By admin With Comments Off

Hit peculiarly hard by the fiscal fallout of the Covid-1 9 pandemic, the micro, small and medium enterprises( MSMEs) in all regions of the country have struggled to keep their business guiding. The Government on its part has tried to provide a lifeline through policy and procedural proclamations. In a communication with ET Digital, Union Minister for Micro, Small and Medium Enterprises, Nitin Gadkari, summarizes his plan for the future, how he plans to tackle the problem of unpaid dues of small businesses and to get foreign investors to employ coin in MSMEs. Edited excerpts: ET Digital( ET ): What is your Ministry’s assessment about the anguish and difficulties that SMEs are facing? The country is currently in a lockdown for a prolong period and what is the feedback from your interaction with small businesses? Nitin Gadkari( NG ): It is quite obvious that MSMEs are facing acute problems and that there is a problem of working capital. We had to protect people from the virus and that is the reason why we had to close everything. Demand and quantity were severely impacted, but we are trying to move on now. There is no lockdown at the moment, we have taken adoption of preventive measures, and we fully support beings. We need to now understand the skill of living with Coronavirus. We need to start our businesses and manufactures, but at the same time protect ourselves. Across India, national road congestion is back at 70 -8 0% ranks, our ports were open and export-import has resumed. At the same time our sells were open, business business are back, but we still need to make some preventive measures. I have a feeling things will get back to normal to the tune of 70 -8 0% this month.There is also an apprehension that most industries are dependent on migrant labour, which would now be impacted. However, numerous that migrated to their home commonwealths now want to come back. I would suggest they apply to their district collectors and coordinate. The manufactures are ready to give them jobs, and my projection is regular, routine occupation will start soon. We need normality in “peoples lives”, but with adoption of preventive measures. 7663865 2Watch the part interview with the Minister for MSME, Nitin GadkariET: There is an apprehension among some in business that if contingencies continue to rise, we may have to go in for another lockdown. What is your understanding? NG: I do not know on what dirt beings are talking about this. The Chief Minister of Maharashtra is clear, many in the Government are clear and I is not think there is any talk in the State Government or the Central Government to go for another lockdown. However, this period is also very complicated because the number of people infected by Covid-1 9 is only increasing. We need to protect ourselves, and again, I would say, we need to understand the art of living with Coronavirus. ET: The pillar of the parcel that the FM announced starting May 13 was the collateral-free MSME loan scheme. However, there is a constant debate between the is necessary that subsidies and credits. While MSMEs appreciate that there is collateral-free loan on offer, they figure a grant or a direct send would be most effective. Can India afford something like that? What are your views? NG: Through the Pradhan Mantri Jan-Dhan Yojana( PMJDY) we have already transmitted some extent immediately to the accounts of the poorest of the poor. However, it is important to understand that the Government is not in a position to fulfill such anticipations. They way we have decided to support small businesses will also enable them to resolve their problems. We are providing additional working capital finance of 20% of the superb credit as a Term Loan at a concessional pace in the best interests. This will be available upto Rs 25 crore outstanding and transactions with a turnover of up to Rs 100 crore. The collateral-free loan amounts to a total liquidity of Rs. 3.0 lakh crore and will benefit more than 45 lakh MSMEs.We have been previously established a Rs. 20,000 crore subject obligation for two lakh MSMEs that are NPA or are stressed so that banks are able to restructure them. We have also organized a Fund of Funds of Rs 50,000 crore for equity dose. MSMEs that are growing fast, have a good track record of GST, income taxation and bank turnover; will get a rating through a simplified scheme. On the basis of that we will provide 15% equity dose. This is gonna be a good support for MSMEs looking to tap the capital market. The most significant and historic decision has been the change in definition of MSMEs. Earlier the clas was divided into services and manufacturing. Now there is only one category and distinction between manufacturing and services sector has been eliminated. Accordingly, the new definitions state that to be classified as micro manufacturing and business division, a business needs Rs. 1 crore of such investments and Rs. 5 crore of turnover. The limit of small-scale cell has been increased to Rs. 10 crore of investment and Rs 50 crore of turnover. To be classified as a medium manufacturing and service units, the limit is Rs. 50 crore of such investments and Rs. 250 crore of turnover. These are significant changesWe have also requested the Government and Public Sector Units to clear all owings to SME within 45 days. I have also requested all Chief Ministers to pass same orders when it comes to state PSUs. I have also requested all industries to give priority to clearing dues of MSMEs. If MSMEs get their owings on time, it will significantly benefit the working capital situation. Beyond this, at the moment we need technology upgradation and foreign investments in MSMEs. We can get foreign investment through an MSME stock exchange. 7663755 7ET: When you talk about the MSME exchange, we already have BSE SME and NSE Emerge. What is that you are referring to and what is your idea? NG: We is not want to make new exchanges, but we need to obligate some sequences. We are working on that idea, but the thinking is that the Government will give 15% equity infusion to MSMEs that was necessary to take the capital market route. When they elevate funds on these exchanges in 2-3 years or when their share expenditures appreciate, we can sell our equity and reinvest in another promising SME. The amount of Rs 50,000 crore will be a rolling fund, which we will use to constantly endow. We are currently realise the rules and regulations because this is a new concept and we will launch this arrangement as soon as possible. ET: You said you have already asked PSUs, state governments, etc to clear oweds to MSMEs. At one point in time the dues amounted to about Rs 5 lakh crore. Has there been a reduction in that number? NG: We have the Samadhaan portal through which we have cleared due to the tune of about Rs 40,000 crore. Nonetheless, it lacks the teeth and “were in” serious discussion and consultation with the Ministry of Finance and the Company Affairs Ministry. We have a lot of suggestions, but this is not the appropriate time to take a strong decision. We will, nonetheless, find a way out. ET: You have often talked about India being the choice for business moving out of China or manufactures looking at alternate supply chain. How is your Ministry looking to become that happen? NG: We have a good coordinated by the foreign investors. We have peculiarly established a Joint Secretary and the government has already made men for this. Three state governments, Gujarat, MP and UP have amended labour laws to attract industries moving out of China. India’s domestic sell is a strength, skilled manpower is available, raw material is obtainable, and we have a good presence in world markets. This is the opportunity for our industry to take advantage and increase our exports. We are taking all measures to ensure that those interested can get all clearances as early as possible. We want to roll out the red carpet for foreign investment.