Category: MSME

Categories
MSME

MSME Sector Created 11 Crore Jobs in India, Contributes 30% to Country’s GDP, Says Nitin Gadkari

Nitin Gadkari | File Image (Photo Credits: Facebook)

New Delhi, October 30: The Micro Small and Medium Enterprises (MSME) sector is the backbone of the Indian economy and has created 11 crore jobs so far, MSME Minister Nitin Gadkari said on Thursday. While speaking at the ‘Namaste Bharat Exhibition’, Gadkari said that the MSMEs contribute to the 30 percent to GDP. He said that as far as export is concerned, it is 48 percent and up till now, 11 crore jobs have been created by the MSME sector.

At the ‘Namaste Bharat Exhibition’, Gadkari said that presently, MSME is the most important sector for the country. “I say it is the backbone of Indian economy,” Gadkari said at the ‘Namaste Bharat Exhibition’. Gadkari was addressing the virtual inaugural ceremony of the 10-day ‘Namaste Bharat’ exhibition.

The 10-day Namaste Bharat is the first of its kind exhibition for promoting ”Made in India” products globally. “We are giving highest priority for how we can reduce our import and increase our exports. The global economy is an open platform where the quality, cost and scale of marketing of products are very important factors. Presently, MSMEs are the backbone of the country,” the MSME minister said.

About Namaste Bharat Exhibition:

Namaste Bharat is backed by the Federation of Indian Export Organisations (FIEO) and the High Commission of Singapore. It has been conceptualized and curated by Singapore’s leading events and marketing company De Ideaz. The exhibition will see over 300-plus local Indian exhibitors showcasing over 1,00,000 Made in India products.

Categories
MSME

MSMEs Are The Backbone of Economy, Can Help in Boosting Exports, Says Nitin Gadkari

Nitin Gadkari (Photo Credits: Facebook)

Mumbai, October 29: Micro, small and medium enterprises (MSMEs) are the backbone of the economy and can help in boosting exports, Union Minister Nitin Gadkari said. The MSME minister said at present, the MSMEs are the backbone of the country. While addressing the virtual inaugural ceremony of the 10-day ”Namaste Bharat” exhibition, Gadkari said that the government wants to create more employment in the backward and tribal areas.

The 10-day Namaste Bharat is the first of its kind exhibition for promoting ”Made in India” products globally. It is backed by the Federation of Indian Export Organisations (FIEO) and the High Commission of Singapore.

“We are giving highest priority for how we can reduce our import and increase our exports. The global economy is an open platform where the quality, cost and scale of marketing of products are very important factors”, he said. He said the government wants to recognise, respect, support and facilitate women entrepreneurs and at the same time we want to incentivise them.

The Namaste Bharat initiative has been conceptualized and curated by Singapore’s leading events and marketing company De Ideaz. The exhibition will see over 300-plus local Indian exhibitors showcasing over 1,00,000 Made in India products.

Talking about the Khadi Gram Udyog, the MSME Minister said that through this, the government is now concentrating on village industries and areas which are socially, economically and educationally backward. “We want to focus on these areas where we need more concentration for gaining and creating employment potential and growth. And that is exactly the way of eradication of poverty, which is our mission. They need guidance, innovation and technology and that is where we need to help them,” the minister added.

Categories
MSME Student Webinar

Big Relief for MSMEs! Ahead of Diwali, Govt Waives Interest on Interest for Loans Up to Rs 2 Crore to Help MSME Borrowers Amid COVID-19 Pandemic

New Delhi, October 25: With the onset of the upcoming festive season, the government announced a major relief to borrowers. The Modi government on Friday announced waiver of interest on interest for loans up to Rs 2 crore irrespective of whether moratorium was availed or not. Reports inform that the Department of Financial Services came out with operational guidelines in the backdrop of Supreme Court’s direction to implement the interest waiver scheme. The scheme is likely to cost the exchequer Rs 6,500 crore.

MSME loans, housing loan, education loans, credit card dues, auto loans, consumer durable loans and consumption loans are covered under the scheme. Talking about the eligibility criteria mentioned in the guidelines, the accounts should be standard as on February 29 which means that it should not be Non-Performing Asset (NPA).

On October 14, the top Court had directed the Centre to implement the interest waiver on loans of up to Rs 2 crore  under the RBI moratorium scheme ‘as soon as possible’ in view of the COVID-19 pandemic. The top Court said that the common man’s Diwali is in the hands of the government. As per the guidelines, the scheme can be availed by borrowers in specified loan accounts for a period from March 1 to August 31, 2020. “Borrowers who have loan accounts having sanctioned limits and outstanding amount of not exceeding Rs 2 crore (aggregate of all facilities with lending institutions) as on February 29 shall be eligible for the scheme,” it said.

As per the scheme, the lending institutions shall credit the difference between compound interest and simple interest with regard to the eligible borrowers in respective accounts for the said period irrespective of whether the borrower fully or partially availed the moratorium on repayment of loan announced by the RBI on March 27, 2020. The scheme is also applicable on those who have not availed the moratorium scheme and continued with the repayment of loans.

The lending institutions after crediting the amount will claim the reimbursement from the central government. Hearing the matter on October 14, the Supreme Court observed that it was concerned about how the benefit of interest waiver would be given to borrowers and said the Centre has taken a “welcome decision” by taking note of plight of the common man, but authorities have not issued any order in this regard.

A bench headed by Justice Ashok Bhushan had said that ‘Something concrete has to be done’ adding that the benefits of waivers to borrowers up to Rs 2 crore must be implemented as soon as possible. The top court, which posted the matter for hearing on November 2, told the advocates appearing for the Centre and banks that “Diwali is in your hand”.

The Centre recently told the apex court that going any further than the fiscal policy decisions already taken, such as waiver of compound interest charged on loans of up to Rs 2 crore for six months moratorium period, may be “detrimental” to the overall economic scenario, the national economy and banks may not take “inevitable financial constraints”. The top court is hearing a batch of petitions which have raised issues concerning the six-month loan moratorium period announced due to the COVID-19 pandemic.

Categories
Business Case Studies MSME Student Webinar

How Entrepreneurship Education Makes You Future Ready Entrepreneurs

In the past years, entrepreneur education has gained immense relevance. This knowledge helps future entrepreneurs to look for opportunities for them. We all know entrepreneurs are a very significant part of Indian economic growth.

With each passing day, jobs are getting limited, and when problems like COVID-19 happens then, job risks get double. With the growth of technological advancements and population growth, be your boss seem to the best option of all.

This education does not only contribute to economic growth but also creates many job perspectives. Therefore, pushing budding entrepreneurs for taking more programs in the field of entrepreneurship education results in many benefits for them in the end.

New Path of Success

As we mentioned, entrepreneurship education is relevant to budding entrepreneurs. It facilitates in developing entrepreneurial skills and knowledge that in future benefits for them only in bringing off their start-up.

This education helps in progressing to the entrepreneur industry-ready with the skills for future businesses and helps in contributing to the Indian-economy. This education helps you in walking a new route to success and growth.

Enhancing Basic Skill and Creativity

By providing entrepreneur education, you capture an understanding of essential life skills of an innovative approach to solving problems, learning to work with a team, and collaborating with people.  These skills can never be taught in the books as these are equally important for the development of an individual.

When you discover an innovative way to solve problems, then you open the door of creativity. By boosting creativity, innovation builds more effective for individuals facing the tough world outside the classroom.

Learn to Solve Problem

Finding out how to solve the problem and identifying it is two important points of learning and understand in the growing years. With years of practice and experience, one can get the skill of problem-solving. But it’s tough to identify the problem before it comes to you, and taking steps to solve it is different.

When you learn both skills of resolving problems and identifying, it creates you as a successful entrepreneur.

Building Leadership Quality

Leadership is the quality which the whole world needs. As a person, if you are interested in making a difference, then this quality will help you surely help in paving a different pathway. While learning about the skills of entrepreneurship, then you tend to incorporate skill and thinking like a leader.

And if you are a women entrepreneur, then this quality will help you to create your own identity in a world full of hurdles.

Making You Ready For An Uncertain Future

Uncertainty is something that you find in anything and everything. In unpredictable and dynamic times, you need to be ready and prepared for the future-ready. By learning the skill of entrepreneurship, you will have one door of the opening venture of your own.

The future is for people who have innovative and leadership skills. A simple entrepreneurship learning can emerge as a path changer and trendsetter in your future. This education is gaining huge friction every day and seeing changing time it can be a great benefit for you.

 

Categories
MSME Startup

COVID-19 Impact: 78% MSMEs and Startups in India Reduced Workforce in Last 8 Months Since Pandemic Broke Out, Says Survey

Startup (Representational Image Only, Photo Credits: NeedPix.com)

New Delhi, October 20: Ever since the COVID-19 pandemic broke out in India, as many as 78% MSMEs and startups across the country have reduced workforce in the last 8 months. As per a survey by LocalCircles, only 22 percent startups and MSMEs have the same or increased workforce as compared to the pre-COVID levels. According to reports, India’s startups and MSMEs ecosystem went through a torrid time due to the deadly pandemic and lockdown that was imposed across the country. Revenues and operations were severely impacted for most businesses which led to cost cutting and some even shut down temporarily or permanently. Per CMIE, 6 million Indians had already lost white collar jobs in the March – August period.

To understand the impact of the pandemic on startup and MSME, a survey conducted by LocalCircles received over 7,000 responses from startups, MSMEs and entrepreneurs spread across 104 top business districts of the country. In the survey, startups and MSMEs were asked about how have workforce adjustments taken place in their business during the Covid-19 pandemic. In response, 25 percent said their business has shut down and all workforce has been let go, while 15 percent said their workforce has reduced by 50 percent or more.

A 19 percent said their workforce has reduced by 25-50%, and another 19 percent said their workforce has reduced by up to 25 percent. A 6 percent said their workforce has increased and 16 percent said they have same workforce as pre coronavirus time. This shows that 78 percent MSMEs and startups in India have reduced workforce in the last 8 months since the COVID-19 pandemic broke out and only 22 percent startups and MSMEs have the same or increased workforce as compared to the pre-COVID levels.

The Government also took steps to help these small businesses through the Atmanirbhar Bharat scheme, but its advantages per feedback from businesses in July this year has been quite limited, the survey said.

The startups and MSMEs in India were asked about how employment of women has been in their business 8 months into the COVID-19 pandemic. In response, 7 percent said women in their workforce have been reduced by 50-100 percent, 12 percent said women in their workforce have reduced by 25-50 percent, and 12 percent said women in our workforce have been reduced by up to 25 percent. 46 percent said they still have same number of women in the workforce as pre COVID-19. Not a single business reported increase in the number of women employees during the course of the 8 months of COVID-19 pandemic.

This means that 31 percent MSMEs and startups in India have reduced women workforce in the last 8 months. The Labour Force Participation Rate (LFPR) among women in India, is one of the lowest in the world and appears to have slid even further during the COVID -19 pandemic.

In the final question, startups and MSMEs were asked looking at the next 6 months as to how do they see employment of women in their business. In response, 50 percent said they don’t plan to hire any women employees while 30 percent said they plan to hire 1-5 women employees. 13 percent said they plan to hire 6-10 women employees and 7 percent were unsure about it.

 

Categories
MSME

Credit Guarantee Scheme For MSME Sector Unlikely to be Extended Beyond October 2020

Currency (Photo Credits: Pixabay) Representational Image

New Delhi, October 19: The Narendra Modi government is unlikely to extend the Rs 3 lakh crore-Emergency Credit Line Guarantee Scheme (ECLGS) for MSME sector beyond October. According to a PTI report, this scheme is meant to provide financial support to businesses, primarily Micro, Small and Medium Enterprises (MSMEs), impacted by slowdown triggered by the coronavirus pandemic.

As per sources quoted in the report, the decision to not extend the ECLGS scheme has been taken even though the sanctioned amount so far is only nearly 65 per cent of the target.

On August 1, the government widened the scope of the Rs 3 lakh crore-scheme by doubling the upper ceiling of loans outstanding and including certain loans given to professionals like doctors, lawyers and chartered accountants for business purposes under its ambit.

The objective of the scheme is to provide support to all those affected in the coronavirus pandemic and if there are no takers for the scheme, then the scheme won’t be extended even though there is some room left.

On August 1, the government widened the scope of the Rs 3 lakh crore-scheme by doubling the upper ceiling of loans outstanding and including certain loans given to professionals like doctors, lawyers and chartered accountants for business purposes under its ambit.

 

Categories
MSME

MSMEs in India Get Big Relief! Govt Ready to Waive ‘Interest on Interest’ on Loans Up to Rs 2 Crore During Moratorium

Money (Photo Credits: Unsplash)

New Delhi, October 17: In a major relief to thousands of individuals and MSME borrowers in India, the Modi government announced that it is ready to waive ‘interest on interest’ on loan up to Rs 2 crore during moratorium. In an affidavit filed on October 3, the government informed the Supreme Court that it has taken a decision to waive ‘interest on interest’ on loans up to Rs 2 crore during the six-month moratorium period. The affidavit said that the only solution is that the government should bear the burden resulting from waiver of compound interest.

The retail borrowers and small businesses are the ones who have been worst hit by the coronavirus pandemic. After the Centre expressed its willingness to waive off ‘interest on interest’ charges on loans up to Rs 2 crore for six months through August, the benefit will now be extended for loans availed by micro, small and medium enterprises (MSMEs), education loans, housing, consumer durables, credit card dues among others.

The categories of loans up to Rs 2 crore include- MSME loans, education loans, housing loans, consumer durable loans, credit card dues, auto loans, and personal loans to professional and consumption loans. The Centre said, “After careful consideration and weighing all possible options, the respondent Union of India has decided to continue the tradition of handholding the small borrowers”.

In the affidavit, the Centre added saying that it is impossible for the banks to bear the burden resulting from waiver of compound interest without passing on the financial impact to the depositors or affecting their net worth adversely, which would not be in larger public interest. “The government, therefore, has decided that the relief on waiver of compound interest during the six-month moratorium period shall be limited to the most vulnerable category of borrowers”, the affidavit said.

According to a report by IANS, after the recommendations of an expert committee, the Centre has altered its stand. Earlier, the RBI and Centre had argued against waiver of interest on interest, as it would be against the interests of other stakeholders, especially depositors, and also unfair to those who have paid their dues.

Background:

A bench comprising Justices Ashok Bhushan, RS Reddy and MR Shah had requested the Centre to have again consider its decision in the backdrop of financial hardship faced by many amid the coronavirus pandemic. Although, the top court had agreed to not waive interest altogether. The Centre said that the top Court would be satisfied that the government bearing this burden would naturally have an impact on several other pressing commitments being faced by the nation, including meeting direct costs association with the pandemic management.

The Centre also cited the example of waiving interest on interest for banks. “In case of SBI alone, waiver of six months’ interest would completely wipe out over half of the bank’s net worth which has accumulated over nearly 65 years of its existence”, the affidavit read. The Supreme Court will take up the matter on October 5 for further hearing. A clutch of petitions was filed in the top court seeking waiver of interest on interest on the deferred EMIs during the moratorium.

 

Categories
MSME

Credit Guarantee Scheme: Banks Sanction Rs 1.86 Lakh Cr to 50 Lakh MSMEs Impacted by Slowdown Amid COVID-19 Pandemic

New Delhi, October 17: The Finance Ministry announced that banks have sanctioned loans of about Rs 1.86 lakh crore to 50 lakh business units under the Rs 3-lakh crore Emergency Credit Line Guarantee Scheme (ECLGS) for the MSME sector, those who have been affected by a slowdown due to the coronavirus pandemic. According to a report by PTI, over 27 lakh MSME units have received about Rs 1,32,246 crore till September 29.

Emergency Credit Line Guarantee Scheme is part of the fiscal component of the Rs 20-lakh crore Aatmanirbhar Bharat Abhiyan package that was announced to lessen the stress caused by the lockdown due to coronavirus pandemic.

The scheme will be applicable to all loans sanctioned under GECL facility during the period from the date of announcement of the scheme to October 31 or till the amount of Rs 3 lakh crore is sanctioned under GECL, whichever is earlier.

Categories
MSME

ECLGS for MSMEs: Banks Sanction Rs 1.87 Lakh Cr to 50.7 Lakh Business Units Under Credit Guarantee Scheme

Money (Photo Credits: Unsplash)

New Delhi, October 10: In a bid to help the micro, small and medium enterprises (MSMEs) sector, which has been the worst-hit by the COVID-19 pandemic, the Finance Ministry announced that banks have sanctioned loans of about Rs 1,87,579 crore to 50.7 lakh business units under the Rs 3-lakh crore Emergency Credit Line Guarantee Scheme (ECLGS) for the MSME sector. Reports inform that of the 50.7 lakh business units, about 27 lakh MSME units received cumulative disbursement of Rs 1,36,140 crore till October 5.

The scheme is the biggest fiscal component of the Rs 20-lakh crore Atmanirbhar Bharat Abhiyan package announced by Finance Minister Nirmala Sitharaman in May 2020 to mitigate the distress caused by lockdown due to COVID-19 by providing credit to different sectors, especially MSMEs. As released by the Finance Ministry, the latest numbers on ECLGS comprise disbursements by all 12 public sector banks (PSBs), 24 private sector banks and 31 non-banking financial companies (NBFCs).

“As of 5 Oct 2020, the total amount sanctioned under the 100% Emergency Credit Line Guarantee Scheme by PSBs, private banks & NBFCs to MSMEs and individuals stands at Rs 1,87,579 cr, of which Rs 1,36,140 cr has already been disbursed,” the finance minister said in a tweet. The loan amounts sanctioned by PSBs increased to Rs 81,648.82 crore, of which Rs 68,814.43 crore has been disbursed as of October 5, Sitharaman further added. At the same time, private sector banks have sanctioned Rs 86,576 crore of loans and disbursed Rs 59,740 crore, while NBFCs sanctioned Rs 3,032 crore with disbursement of Rs 2,227 crore.

“The ambit of the Scheme was expanded to include MSMEs with turnover of up to Rs 250 crore & individuals for business purposes. As of 05 Oct 2020, Rs 17,460 crore of loans to individuals have been sanctioned, of which Rs 5,939 crore has been disbursed,” she in a tweet. In another tweet, Sitharaman said as many as 33 stranded housing projects with investment of Rs 4,197 crore were accorded final approval under the SWAMIH scheme. “Special window for Affordable & Mid Income Housing Fund (SWAMIH) is working at a fast pace to provide relief to homeowners. As on 05.10.2020, 33 projects with investment of Rs 4,197 cr accorded final approval & will lead to completion of 25,048 home units,” the finance minister said in tweet.

The overall, 123 projects have now been sanctioned, including final approval to 33 projects, with an investment of Rs 12,079 crore that would target to provide relief to 81,308 homeowners, she said. On May 20, the Cabinet approved additional funding of up to Rs 3 lakh crore at a concessional rate of 9.25 per cent through ECLGS for MSME sector.

Under the scheme, 100 percent guarantee coverage will be provided by the National Credit Guarantee Trustee Company (NCGTC) for additional funding of up to Rs 3 lakh crore to eligible MSMEs and interested Micro Units Development and Refinance Agency (MUDRA) borrowers in the form of a guaranteed emergency credit line (GECL) facility. According to a report by PTI, for this purpose, a corpus of Rs 41,600 crore was set up by the government, spread over the current and next three financial years. The scheme will be applicable to all loans sanctioned under GECL facility during the period from the date of announcement of the scheme to October 31 or till the amount of Rs 3 lakh crore is sanctioned under GECL, whichever is earlier.

Categories
MSME

MSME Loans Update: Interest Subvention Scheme on MSMEs Loans Extended Till End of March 31, 2021

Mumbai, October 8: The Reserve Bank of India (RBI) announced that the two percent interest subvention scheme for micro, small and medium enterprises (MSMEs) on loans extended by co-operative banks has now been extended till March 31, 2021. Moreover, the terms of the scheme have also been tweaked. In November 2018, the government had announced the ”Interest Subvention Scheme for MSMEs 2018” for scheduled commercial banks for two financial years 2018-19 and 2019-20. With the new development in place, the scheme has now been extended for the financial year 2020-21.

According to reports, co-operative banks also became as eligible lending institutions effective from March 3, 2020 and the coverage of the scheme is limited to all term loans and working capital to the extent of Rs 100 lakh. The scheme provides for an interest relief of two per cent per annum to eligible MSMEs.

The RBI, in a notification, said certain operational guidelines for the scheme have been further modified by the government. The validity of the scheme has been extended till March 31, 2021. “Accordingly, fresh or incremental term loan / working capital limit extended by co-operative banks with effect from March 3, 2020 will be eligible for coverage under the scheme,” RBI said.

A report by PTI said that the requirement of Udyog Aadhaar Number (UAN) may be dispensed with for units eligible for GST. Units not required to obtain GST may either submit Income Tax Permanent Account Number (PAN) or their loan account must be categorised as MSME by the concerned bank, the RBI said. Moreover, RBI has asked co-operative banks to take appropriate action as envisaged in the operational guidelines and issue necessary instructions to their branches or controlling offices for successful implementation of the scheme.

Reports inform that according to the scheme, the loan accounts on the date of filing claim should not have been declared as non-performing assets (NPAs). No interest subvention would be admissible for any period during which the account remains NPA.