The term MSME stands for Micro, Small, and Medium Enterprises. The Ministry of MSME is the apex executive body that deals with the formulation and administration of various rules, regulations, and laws relating to micro, small, and medium enterprises.
The MSME offers various services to the entrepreneurs such as training for entrepreneurship development, Technical and managerial consultancy, provides assistance for exports, Preparation of the project and product profile, etc.
On 1st August 2020, the Government has approved the inclusion of individual loans under its ambitious Emergency Credit Line Guarantee Scheme (ECLGS). The ECGLS package is announced by our finance minister due to the economic distress caused by the COVID-19 pandemic and it is about Rs. 20 Lakh Crore comprehensive package. This will help the MSME sector by addressing their problems such as working capital needs, operational liabilities, and restart business impacted due to the COVID-19 crisis.
There is a massive boost in the MSME credit guarantee schemes. And now they offer loans for individual entrepreneurs. On Saturday 1st August 2020, our Finance Minister said that “after considering the other schemes and consultations with stakeholders, it is now intended to include individual loans for business purposes within the ambit of Emergency Credit Line Guarantee Scheme. The MSME sector plays an instrumental role in making India self-reliant and they have taken several steps to strengthen the sector.
Another major announcement from the finance minister on Saturday is that the government has also ramped up the outstanding loans limit from earlier up to Rs 25 crore to Rs 50 crore. Notification from the ministry of finance highlights that the Guaranteed Emergency Credit Line (GECL) funding having the maximum amount under the scheme would also correspondingly increase from Rs 5 crore at present (that is, 20% of 25 crores) to Rs 10 crore and also increased their annual turnover ceiling from Rs 100 crore to Rs 250 crore.
While taking these changes into consideration, it is likely that the ambit of ECLGS will be expanded by an additional amount of more than Rs 1 lakh crore. The government is also looking to come up with a new public sector enterprise policy under which, it will define strategic sectors that will not have more than four Public Sector Undertakings (PSUs).