Published 02:49 IST, June 2nd 2020
Smriti Irani thanks Modi for boost to MSME industry, says it'll have transformative impact
In a series of tweets, Irani said that the infusion of Rs 20,000 crore and Rs 50,000 crores will boost the sector which is the backbone of the economy.
Union Minister Smriti Irani thanked Prime Minister Narendra Modi for approving the support for Micro, Small and Medium Enterprises (MSMEs). Irani claimed that the decisions announced will have a "major transformative impact on entire textiles industry specially apparel segment which primarily consists of MSMEs".
'Grateful to PM Modi'
In a series of tweets, Irani said that the infusion of Rs 20,000 crore and Rs 50,000 crores will boost the sector which is the backbone of the economy. She added that the decision to define the sector after 14 years will also help in the vision of 'Aatmanirbhar Bharat'.
Earlier in the day, the Union Cabinet approved the upward revision of MSME definition. After receiving representations that the revision of definition in the recently announced Aatmanirbhar Bharat economic package was not in tune with market conditions, the Centre has decided to further amend the definition of medium manufacturing and service units. It will now be Rs.50 crore of investment and Rs.250 crore of turnover. Moreover, the turnover with respect to exports shall not be counted in the limits of turnover for any category of MSME units.
Addressing a press briefing, Union Information and Broadcasting Minister Prakash Javadekar elaborated that the Cabinet had also approved the provisioning of Rs.20,000 crore as subordinate aid to provide equity support to the stressed MSMEs. The equity infusion of Rs 50,000 crore for MSMEs through Fund of Funds received approval as well. This shall not only establish a framework to help MSMEs in capacity augmentation but also provide an opportunity to get listed in the stock exchanges. According to Javadekar, the Cabinet's decisions would help in attracting investments and creating more jobs.
Nitin Gadkari said, "The MSMEs are going through a tough time. Our banking sector had restructured 6 lakh MSMEs as I had mentioned in March. We have created a 'fund of fund' for MSMEs going through tough times, to make the industry viable. A distress asset fund for Rs 4000 crores has been made now for them. Now we have made it 5 times bigger at Rs 20,000 crore. This is said to benefit over 2 lakh MSMEs."
Nitin Gadkari revealed that the other major decision taken in the meeting was the initiation of a Rs 10,000 crore fund. "Whichever MSME has a bigger turnover we will buy equity in them at a maximum of 15 per cent to give them the strength to participate in the stock exchange. We will keep rotating between MSMEs to strengthen them in the share market through this," he said.
Updated 02:49 IST, June 2nd 2020