Union Min RS Prasad lauds govt's Rs 3 lakh cr strong booster for MSMEs; 'more to follow'

Union Law Minister Ravi Shankar Prasad on Wednesday said that the government's announcement of Rs 3 lakh crore will act as a strong booster for the micro, small and medium sector industries and it will directly impact nearly 45 lakh MSMEs. He added that the first series of measures is a "wholesome package" to the fulfilment of PM's promise and surely a lot of others are to follow. 

'Even the definition of MSME has changed'

Speaking to news agency ANI, Prasad said, "Finance Minister Nirmala Sitharaman has outlined the first series of follow-up action as the Prime Minister indicated. What is important is 3 lakh crore of strong booster for MSME industries. This is going to directly impact nearly 45 lakh MSMEs saving their jobs, their business opportunity, making them more competitive. Even the definition of MSME has changed."

"More important in the contract for the government of India supply up to 200 crores, MSME will also be allowed to compete. Also good liquidity for the non-banking financial sector, partial credit scheme, and the government standing as a guarantee for MSME loans by the bank plus other tax incentives to the construction, other sectors. The first series is a wholesome package to the fulfilment of PM's promise and surely lot of others are to follow," the Union Minister added.

Finance Minister Nirmala Sitharaman on Wednesday announced a series of liquidity measures for millions of small businesses reeling under the impact of Coronavirus lockdown, including collateral-free automatic loans worth Rs 3 lakh crore. Borrowers with up to Rs 25 crore outstanding and Rs 100 crore turnover will be eligible. These loans will have a four-year tenure and have a moratorium for 12 months on principal payment.

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There will be a 100% credit guarantee cover to banks and non-banking finance companies on principal and interest. The scheme can be availed till October 31. "This will enable 45 lakh micro, small and medium enterprise (MSME) units to resume business activity and also safeguard jobs," said FM Sitharaman.

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The announcements came a day after Prime Minister Narendra Modi announced a Rs 20 lakh crore special economic package amid nationwide COVID-19 lockdown. "Prime Minister laid out a comprehensive vision, and that vision was laid out after wide consultations with several sections of the society... Essentially this is to spur growth and to build a very self-reliant India and that is why this whole initiative is called Atmanirbhar Bharat Abhiyan," Sitharaman said.

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(With ANI inputs)