The backbone of our country is finally getting much-needed relief. The micro small and medium enterprise is getting a significant boost after the cabinet approved the relief package announced by the finance minister before.
The council approved the package worth,₹ 20000 cr for the MSME sector that will benefit the 2 lakh units in India. Apart from this Government also approved the ₹50000 cr package for the street vendors in which a loan of ₹10000 will be provided to the at least 50-lakh vendors on a government guarantee.
The MSP has also increased to 150% for the farmers that will directly turn in to 50 to 80 % profit to the farmer. The MSP will come into effect from the coming Kharif crop.
The cabinet also refined the definition of the MSME sector; now the small unit investment will be raised from ₹ five cr to ₹ ten cr with turnover less than ₹ 50 cr.
The standard unit definition is also tweaking to an investment of ₹ 50 cr and turnover less than ₹ 250 cr. All the service and manufacturing related terms are now invalid. Earlier definition said that an investment of ₹ 20 cr and ₹ 100 turnovers would be term as a medium enterprise.
Mr. Nitin Gadkari added, “We interacted with the different associations, and they wanted an increase in the threshold for medium businesses. The Government has decided to accept their suggestions. It has also decided that export turnover will not be a part of the definition.
Fund of Funds given as per MSME scheme
The Government also established a fund of fund that with a corpus of ₹ 10,000 cr that will provide equity support to the ailing MSME sector. Will be mobilizing equity of at least Rs 50000 cr. It will help to approximately 25 lakh MSME.