MSMEs 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.

9th BRICS Trade Ministers Meet held in Brazil

The 9th BRICS Trade Ministers Meet was held in Brasilia, Brazil. It was attended by Union Minister Commerce and Industry Piyush Goyal, during which he deliberated on global economic climate with his counterparts from other member nations.

Key Deliberations at Meet

The global economic outlook is facing grave challenges amidst growing protectionism and rising trade tensions manifested in unilateral measures, therefore, Trade and Investment cooperation between BRICS nations must be advanced.

Growing trend of non-tariff barriers (NTBs) which deny market access is leading to economic uncertainty as well as raising the cost of doing trade for developing countries especially Ministry of Micro, Small and Medium Enterprises (MSMEs). Thus it is important to preserve rules-based trading system and adequate low-cost finance to provide sustainability for MSME. A win-win mindset is also needed from all concerned countries to spur trade & promote equity.

The need of the hour is to develop digital infrastructure, digital skills and institutions particularly in developing and less developed world.

With a view to balanced and equitable outcomes, the BRICS member countries must look at ways and means to increase cooperation amongst themselves across all modes of services.

What is BRICS?

It is an abbreviation for an association of 5 major emerging national economies, namely- Brazil, Russia, India, China and South Africa. The association was founded in 2006 and was originally grouped as first four as “BRIC”, before South Africa joined it in 2010. The BRICS countries comprises of 42% of the world’s population, having 23% of global GDP.