Micro, small and medium enterprises (MSMEs) are the development quickening agents of the Indian economy system, contributing about 30% of the nation’s (GDP). They are an indispensable aspect of the supply chain and contribute about 40% of the overall exports. MSMEs likewise plays a significant function in generating employment, as they employ around 110 million individuals over the nation. Curiously, MSMEs are interlaced with the rural economy also, as the more significant part of the MSMEs work in rural India.
To guarantee that MSMEs keep driving the Indian economy system development, the Government has declared different plans to improve this area every once in a while. As of late, considering the financial difficulty brought about by Coronavirus, the government has reported few plans under ‘Atmanirbhar Bharat,’ i.e., the Self-reliant India initiative. As the need, the model for arranging MSME has likewise been overhauled. Under the reconsidered rule, the consolidated variables of ‘Investment in plant and machinery’ and ‘Turnover’ are needed to be considered to decide if a business ought to be delegated a micro, small, or a medium enterprise.
Conversely, before the characterization of an MSME unit was based just on its investment in plant and hardware; furthermore, relying upon whether the enterprise was in the manufacturing division or the services area.
Impact of Covid-19 on Indian Economy System
The Indian economy system was encountering a massive lull in the course of the last few quarters. In the third quarter of 19-20, the economy developed at a 6-year long term low pace of 4.7%. Investment and consumption requests have been mulling and various improvement measures to bring back the economy on a development path. There was a definite expectation of healing in the fourth quarter of 19-20. Anyway, the new Covid-19 pestilence made recovery very troublesome in the close to medium term.
The outbreak has introduced new difficulties for the Indian economy system, causing an alarming effect on demand and supply-side components, wreaking India’s development story. While Indian MSME’s, bearing a few parts of this sector, will potentially protect themselves from the worldwide supply chain interruptions brought about by the outbreak due to generally lower dependence on the imports, their exports to Covid-19 contaminated countries could endure a shot.
In the end, The Three Significant Contributions to India’s GDP – Private Consumption, Investment & External Trade – Will all get affected.
Finally, the three significant commitments to India’s GDP – Private Consumption, Investment, and External Trade – will all get influenced.
As the world and the Indian economy endeavor to adjust moderating the health risk of Covid-19 with the financial stakes, quick measures were should have been taken to
- Prevent breakdown of liquidity
- Protect the vulnerable while empowering social distancing
- Intensify wellbeing intercessions on a war balance
- Unlock manufacturing, logistics and supply chain management &
- Stimulus bundle to resuscitate Indian Economy System and MSME’s – the spine and engine of new India.
India is fortunate to have a steady government under the initiative of our respectable Prime Minister, Shri Narendra Modi Ji, whose administration has been working day and night, monitoring and regulating the circumstances over each state. He has been taking prudent steps to defend the lives of Indian’s and restore the Indian Economy System by boosting the morale of MSME and Business Enterprise Owners by declaring the Stimulus Package of Rs. 20L Cr. in the various stage.
MSME Stimulus Packages announced by GOI
- Collateral free automatic loan will currently be accessible for MSMEs. This facility is of an aggregate sum of Rs 3 lakh Cr.
- Subordinate debt worth Rs 20,000 Cr. presented for focused on MSMEs.
- Rs. 50,000 Cr. Value implantation through MSME Fund of Funds.
- Global tenders will be denied in govt acquirement for tenders under Rs 200 Cr.
- Ensuring that e-market linkage is given to all MSMEs so they can discover their market in the absence of trade fairs
- Rs. 2500 Cr. EPF Support for Businesses and Workers
- EPF Contribution decreased for Business and Workers for three months
- Rs. 30,000 Cr. Liquidity offer for NBFC/HFC/MFI’s
- Rs. 45,000 Cr. liquidity mixture through Partial Credit Guarantee Scheme for MBFC’s/MFI’s
- Rs.90,000 Cr liquidity Infusion for DISCOM’s (Distribution Company (In India),
- All GOI central offices (Railways, Ministry of Road and Transport, Central Public Works Department) to give a half year expansion to contractual workers
- Extension of Registration and Completion date of land extends under RERA
- Rs. 50,000 Cr. The liquidity mixture through TDS/TCS decreases.
- Due Date of all ITR stretched out for AY 20-21 to 30th Nov, 20, and tax Audit to 30th Oct 2020. All forthcoming Income Tax Refund will be cleared right away
Distressed Asset Fund – Subordinate Debt Scheme for MSME’s
Credit Guarantee Scheme for Subordinate Debt (CGSSD)
GOI is giving one more attempt and preventive measure to restore the Indian Economy System reported an upgrade package of Rs. 20,000 Cr. to resuscitate those MSMEs which got NPA’s or are under Stressed to help MSMEs by the method of extra infusing the liquidity in their projects to help MSME’s restore their business, liable to help 2L + MSME.
This plan tries to stretch out help to Promoters of the operational MSME’s which are stressed or have become NPA (according to bank standards) before 30th April 2020
Under this scheme, those MSME’s getting qualified – their advertisers will be given 15% of their stake (value + Debt) or Rs. 75 Lakhs, whichever is lower.