The MSME sector has emerged as a highly vibrant and dynamic sector of the Indian economy over the last few decades. There are close to 1.33 crore MSMEs registered in India with 59% of them engaged in Manufacturing and 41% in the service sector. They make up close to 45% of India’s exports.

Indian laws have been amended to give the much-needed impetus to the MSME sector during the ongoing COVID-19 pandemic :

As of now wholesale and retail trade except of motor vehicles have been kept out of MSME eligibility.

Key Benefits of MSME registration :

• Customers of MSME are liable to pay their dues within 45 days or they will have to pay compound interest at 3 times of RBI notified bank rate.
• Central Govt. ministries and PSU’s mandatorily procure 25% of their goods from MSMEs.
• Lower Bank Interest rates as compared to market rates.
• Interest subvention of up to 2% for GST registered MSMEs on new loans.
• 50 percent subsidy for patent registration by making an application to the respective ministry
• Single brand retailers with at least 51 % foreign investment, to source at least 30% of goods from MSMEs, village, and cottage industry.

Benefits under Atmanirbhar Bharat Abhiyan

• Collateral free loans will be provided to entities with upto INR 100 crore turnover. An emergency credit line will be opened by banks to provide upto 20% additional credit without taking any fresh collateral.
• MSME’s to mandatorily receive its dues within 45 days from GOI and central PSU’s.
• Govt. will setup a Fund of Funds with a corpus of 10,000 crore to provide equity funding to MSME’s with growth potential.
• E-market place to be promoted as a replacement  for trade fairs and exhibitions.
• No global tendors will be allowed upto a limit of INR 200 crore by GOI.

Appendix :

GoI schemes for MSME’s :

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