New Delhi, May 13, Giving boost to the slowed economy in the wake of Covid-19 pandemic, Union Finance Minister Nirmala Sitharaman on Tuesday announced that of the Rs 20 lakh crore economy stimulus announced by Prime Minister Narendra Modi, Rs 3 lakh crore was allocated for collateral-free automatic loan for businesses, including MSMEs.
This will enable 45 lakh MSME units to resume business activities and also safeguard jobs, she said.
Addressing a press conference along with her deputy Anurag Thakur, she said with this, the definition of MSME has been revised by raising the investment limit. An additional criteria of turnover is also being introduced.
Ms Sitharaman said that packages for various sectors are being announced under the Atmanirbhar Bharat scheme. Under this package, a provision of Rs 3 lakh crore collateral free loan has been made for MSMEs which will be for four years and the principal will not have to be repaid for the first year.
To provide relief to businesses, it is proposed to extend to them additional working capital finance of 20 per cent of their outstanding credit as on February 29, 2020, she said.
Under this, MSMEs with a turnover of Rs 100 crore will get loans of up to Rs 25 crore.
The Finance Minister said under the new definition of MSME, micro enterprises will be able to invest up to Rs 1 crore and its business limit will be Rs 5 crore. Similarly, an investment of Rs 10 crore can be made in a small enterprise and its total annual turnover will be Rs 50 crore. The medium enterprise will have an investment of up to Rs 20 crore and its total business will be up to Rs 100 crore.
She said that along with this, a provision of Rs 20 thousand crore has been made to help the stressed MSMEs. This would benefit MSMEs who are NPAs and will benefit more than two lakh MSMEs.
Atmanirbhar Bharat: Rs 3 lakh cr collateral-free loan for MSMEs
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