Prime Minister’s Vision- “ATMANIRBHAR BHARAT”

  • The Prime Minister Narendra Modi declared Special economic and comprehensive package of Rs. 20 lakh crore which is equivalent to 10 per cent of India’s GDP , to support better economy which is badly hit due to COVID 19.
  • It is time to become vocal for our local products and make them global.

45 Lakh MSMEs To Benefit Via Rs 3 Lakh Crore Loans

The central government announced six reforms to support the Micro, Small and Medium Enterprises (MSMEs) which are considered the backbone of India’s economy in order to revive a Covid-19 hit economy and to make the Indian economy self-reliant.

1. Rs 3 lakh crores Collateral free Automatic Loans for Business, incl MSME

  • Collateral free automatic loan for MSMEs up to Rs.3 lakh crore which means MSMEs is not required to pay any collateral or guarantee for the loans availed under this scheme because loan is provided with 100% Central Government Guarantee.
  • This loan will be for 4 years with a Moratorium of 12 Months where MSME not be required to pay any principal component of the loan for the first year.
  • This will give benefit and support 45 lakh MSME to restart business activities.

2. Rs 20,000 crore Subordinate Debt for MSMEs

  • Rs 20,000 crore subordinated debt for stressed MSMEs who needs equity support. It will help functioning those MSMEs which are either NPA (non performing assets) or are economically stressed. Around 2 lakh MSMEs can avail benefit under this category.
  • The government will provide Rs. 4,000 crore partial credit guarantee support to banks and promoters of the MSMEs will be given debt by banks in the form of equity infusion.

3. Rs 50,000 cr equity infusion through MSME Fund of Funds

  • Fund of Funds with Corpus of Rs 10,000 crores will be set up.
  • Rs 50,000 crore will be infused as equity to standard MSME.
  • This will provide great support in grabbing opportunity to expand their capacities and their size and also encourage MSMEs to get listed on Stock Exchanges.

4. New definition of MSMEs

  • The definition of MSME is changed in order to grow and encourage MSMEs without losing on the benefits availed by MSMEs.
  • The investment limit that defined an MSME is revised upwards and Turnover criteria is also introduced to categorise MSMEs.
  • Along with these, differentiation between manufacturing and service MSMEs is removed.

Revised MSME Classification

Composite Criteria : Investment And Annual Turnover








Investment<Rs. 1 Cr.


Turnover < Rs.5 cr.

Investment<Rs. 10 Cr.


Turnover < Rs.50 cr.

Investment<Rs. 20 Cr.


Turnover < Rs.100 cr.

For micro-enterprises in both the manufacturing and service sectors, the investment limit is being raised to Rs 1crore with a maximum turnover of Rs 5 crore. Similarly, for small enterprises in both the sectors, the investment limit is being raised to Rs 10 crore with a maximum turnover of Rs 50 crore and finally for medium enterprises in manufacturing and service sector, the investment limit is raised to Rs 20 crore with a maximum turnover of Rs 100 crore.

5. Global tender to be disallowed upto Rs 200 crores

  • The government procurement tenders up to Rs 200 crore will be no longer allowed to global tenders, and now it is a chance for MSMEs to increase their business.
  • The government said it will make necessary amendments to General Financial Rules to enable this provision. This aims towards creating a self-reliant India and support Make in India.

6. Other interventions for MSMEs

  • MSMEs facing issues with liquidity due to COVID-19 therefore e-linkage market is being provided to MSMEs to act as a replacement for Post Covid trade fairs and exhibitions.
  • In addition to this MSME receivables from Government and Central Public Sector Undertakings to be released in 45 days.

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