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Prime Minister Narendra Modi launched Micro, Small and Medium Enterprises (MSME) Support and Outreach Programme. As part of this programme, PM unveiled 12 key initiatives which will help the growth, expansion and facilitation of MSMEs across the country. There are five key aspects for facilitating the MSME sector. These include access to credit, access to market, technology upgradation, ease of doing business, and sense of security for employees.
MSME Outreach Programme
It aims to boost MSME sector it is one of important sector for major generations of employment opportunities. It will run for 100 days covering 100 Districts throughout the country. Various Central Ministers will visit these districts in order to apprise entrepreneurs about various facilities being extended to MSME Sector by Union Government and financial institutions. Under it, entrepreneurs will be encouraged to come forward and make best use of these facilities including access to credit and market, etc.
Under Access to Credit aspect of this porgramme, Government will launch 59 minute loan portal to enable easy access to credit for MSMEs. Loans upto Rs. 1 crore will be granted in-principle approval through this portal, in just 59 minutes. The link to this portal will be available at GST portal.
Government will give 2% interest subvention for all GST registered MSMEs, on fresh or incremental loans. For exporters who receive loans in pre-shipment and post-shipment period will get increase in interest rebate ranging from 3% to 5%.
All MSMEs or companies with turnover more than Rs. 500 crore will now be compulsorily brought on Trade Receivables e-Discounting System (TReDS). This will enable entrepreneurs to access credit from banks, based ontheir upcoming receivables. This will help to resolve their problems of cash cycle.
For access to markets for entrepreneurs, Union Government has taken number and now it is mandatory for public sector companies to procure 25 %t, instead of 20% of their total purchases from MSMEs. Out of the 25% procurement mandated from MSMEs, 3% is reserved for women entrepreneurs. It is mandatory for all PSUs of Union Government to be part of GeM.
For Technology Upgradation, Government will form 20 hubs and 100 spokes in the form of tool rooms will be established vital part of product design. For ease of doing business, government will establish clusters of pharma MSMEs. 70% cost of establishing these clusters will be borne by the Union Government.
For simplification of government procedures, the return under 8 labour laws and 10 Union regulations will be now filed only once year. Now establishments to be visited by an Inspector will be decided through computerised random allotment.
Air pollution and water pollution laws now have been merged, and henceforth under them single consent and will be required, besides return will be accepted through self-certification. Government has promulgated ordinance under which, for minor violations under the Companies Act, entrepreneur will no longer have to approach Courts, but can correct them through simple procedures. For Social Security for MSME Sector Employees, government will launch mission to ensure that they have Jan Dhan Accounts, provident fund and insurance.
Union Cabinet has approved proposal for promulgation ordinance to amend the Companies Act, 2013. The ordinance had received assent from President Ram Nath Kovind under Article 123 and has been promulgated. The amendments to the Act are aimed to promote ease of doing business as well as ensure better compliance levels.
The ordinance to change Companies Act seeks to declog National Company Law Tribunals (NCLTs) and decriminalise minor offences by companies. The ordinance will transfer 90% of the cases to regional directors under Ministry of Corporate Affairs from NCLTs. Moreover, it will retain status of all non-compoundable offences since they are serious in nature.
Union Government-appointed Committee (headed by Corporate Affairs Secretary Injeti Srinivas) had suggested various changes to Act, including restructuring of corporate offences under companies law and in-house adjudication mechanism to ensure that courts get more time to deal with serious violations.
Apart from restructuring of corporate offences to relieve special courts from adjudicating routine offences, the committee had mooted re-categorisation of 16 out of 81 compoundable offences under the Act. This move was recommended to bring down NCLT’s load as it looks at insolvency and bankruptcy cases as well.
It also recommended disqualification of directors in case they have directorships beyond permissible limits and capping an independent director’s remuneration. It also had suggested that remuneration any independent director gets from company should be capped at 20% of his gross income in year to prevent any material pecuniary relationship, which could impair their independence on the board.