The government drafted a post lockdown plan for India to be ‘Atma Nirbhar’ and MSMEs to profit out of it. Below is how the government is helping MSMEs to build Atma Nirbhar MSMEs amid the pandemic:
Action Plan for ‘Atma Nirbhar’ MSMEs
The ministry of MSMEs has prioritised the production of COVID related items such as masks, ventilators, PPE, ventilators, gloves, testing equipment, infrared, thermometers, etc. Also, it is supporting the mass production of CFCs for such products by MSMEs. Further, the ministry will give faster approvals to the projects, including the production of items related to medical/auxiliary categories.
Short Term Strategies
The government has directed DPE, Railway Board and other Ministries to allow a relaxation of two months from the scheduled date of delivery in the applicability of liquidity damages clause. Further, organisations have been directed to clear pending payments to the MSMEs including the ones pending with MSEFC.
Apart from this, the government has asked the state governments to either exempt or reimburse fixed charges of MSMEs during and post the COVID period, which will help to bring down fixed costs. Besides, the Ministry has approached the Finance Ministry to reduce GST rates on raw materials to provide an uninterrupted supply of raw materials to small enterprises. The government has offered suitable relaxations in filing GST returns and a timely refund of GST payments.
MSMEs have been provided a moratorium period of six months for repayment of debts without any change in credit ratings. Also, the NPA norm for declaring NPAs has been extended to 180 days for at least the next two years. This will provide an uninterrupted supply of credit in the crisis. Also, the government has provided an interest rate subvention of 3% to healthy MSMEs.
Long Term Strategies for Sustainability of MSMEs
The government has earmarked small enterprises in the earmarked priority sector with an increasing sub-target limit from 10% to 75%. Also, the banks will provide small collateral-free loans to certain enterprises to encourage employment.
Promoting ‘Swadeshi’ for ‘Atma Nirbhar’ MSMEs
The ministry plans to introduce Indian quality standard certification to provide “non- tariff barriers” cover for incentivizing locally manufactured “SWADESHI” products. Further, it will provide a price incentive advantage on a price to Indian suppliers compared with the cost of import for a particular product. In all, the drafted plan emphasis on making ‘’Atma Nirbhar’ MSMEs.