Loan under 59 minutes among Modi’s major sops for MSMEs

Prime Minister Narendra Modi on Friday announced a host of sops for the ailing Micro, Small and Medium Enterprises (MSME) sector including approval for loans up to Rs 1 crore within 59 minutes with 2 per cent interest subvention.

Making 12 major announcements ahead of the upcoming Assembly and Lok Sabha polls, he also promised them freedom from harassment by government officials – be it in terms of inspections, getting clearances for businesses or minor violations under the Companies Act.

He said now the establishments to be visited by an inspector would be decided through a computerized random allotment and that an entrepreneur would no longer have to approach the court for minor violations as the government had issued an ordinance to that effect.

To prop up the sector that has been reeling under the impact of demonetisation and the new tax regime, Modi said he would personally monitor the implementation of this support and outreach programme in 100 districts over the next 100 days.

He said despite being the second largest employer in the country after agriculture, MSMEs faced challenges in terms of credit, market linkage, technological advancements, government interference and security.

The 12 decisions announced by the Prime Minister not only promised quick and cheap credit to small businesses, but also a strong market linkage, boost to women entrepreneurs and small pharmaceutical units, freedom from inspector raj, simplification in regulatory filings, decriminalisation of small mistakes and self-certification for environment clearances.

He said the MSMEs will no more have to struggle with government procedures as it was decided to simplify them. Now returns under eight labour laws and 10 union regulations must be filed only once a year, instead of twice.

Modi said his government had decided to merge the two clearances — environmental clearance and consent to establish — into one and business owners could file self-certified returns.

“These decisions taken in the last few weeks are this government’s gift to the sector on Diwali. These will start a new chapter in the sector. It will give a major boost to the Make in India campaign.”

To make easy and quick access to cheap credit, Modi said small units registered with the Goods and Services Tax (GST) would be able to avail Rs 1 crore loan in less than 59 minutes from the comfort of their homes without running to the banks.

Since September 25, when Finance Minister Arun Jaitley had launched the 59MinutesPortal, more than 72,000 units have already been sanctioned their credit requests, Modi said.