MSME Sector Current Affairs - 2020

Scheme with Guarantee Cover worth Rs 20,000 Crore launched for MSMEs

This scheme was announced as a part of the AtmaNirbhar Bharat Package by Finance Minister back on 13th May 2020. On 24th June 2020, the Credit Guarantee Scheme for Sub-ordinate Debt (CGSSD) was launched. The scheme is also called as Distressed Assets Fund- Sub- Ordinate Debt for MSMEs.

Union Minister of Medium, Small and Marginal Enterprises (MSMEs) Nitin Gadkari launched the scheme. After consultation with the Reserve Bank of India, SIDBI, and the Ministry of Finance, the scheme was approved by the Committee on Economic Affairs.

Background

As a result of nationwide lockdown to contain the spread of COVID-19, most of the economic activities came to a halt across the globe. In India as well, the livelihood of millions of people is dependent on the MSME sector.

As per data available to the Government, the biggest challenge that was faced by these MSMEs was in getting capital for restarting their businesses.

About the Scheme

The scheme will provide support to about 2 lakh MSMEs across the country. Rs 20,000 crores of guarantee cover have been sanctioned under the scheme.

The guarantee cover under the scheme will be provided from banks to the promoters. Only those promoters, who’s MSMEs have either become a Non-Performing Asset (NPA) or are financially stressed as on 30th April 2020 will be eligible for the scheme.

Through Credit Guarantee Fund Trust for Mirco and Small Enterprises (MSEs), the scheme will be implemented.

First Silk Processing plant in Gujarat to boost “PATOLA SAREE” production

On January 3, 2020, the Khadi and Village Industries Commission (KVIC) inaugurated the first “Patola Saree” production unit in Gujarat. This will help to cut down the cost of silk yarn production and also will increase the sale of raw material for Patola sarees.

Highlights

The silk production plant has employed 90 local women of which 70 belong to Muslim community. The installation cost of the plant was Rs 75 lakh and the KVIC operating under Ministry of MSME has contributed Rs 60 lakhs. The plant has been built in a backward district of Gujarat (Surendranagar district). The aim of the plant is to make silk readily available to Patola saree manufacturers to boost its production.

Patola Saree

Patola is the trademark saree of Gujarat. They are highly expensive and were once worn only by royal aristocratic families. With the new plant, the cost is expected to come down.

The idea behind the installation of new plant is to buy cocoon from the states of Karnataka and West Bengal and process them in the plant. This will help reduce the cost of production to a great extent.

Among all silk varieties in India, Patola sarees are among the top 5 silk sarees.

History

The Patola silk was founded by the Salvi caste (Scheduled) in the states of Maharashtra and Karnataka. They moved to Gujarat in 12th century in order to acquire patronage of Rajputs.