Union minister Nitin Gadkari asks corporate India to clear outstanding payments to MSMEs
Union Minister Nitin Gadkari on Tuesday asked India Inc to clear huge outstanding payments to micro, small and medium enterprises at the earliest in order to ease the distress in the sector and inject liquidity into market
New Delhi: Union Minister Nitin Gadkari on Tuesday asked India Inc to clear huge outstanding payments to micro, small and medium enterprises at the earliest in order to ease the distress in the sector and inject liquidity into market.
In a discussion with senior industry members of FICCI via video conferencing, the MSME minister exhorted the industry to clear pending dues owed by them to the units.
"I would like to request you, major industries also have huge outstanding dues of MSMEs. We were earlier considering framing a law entailing stringent rules regarding such payments. However, now is not the right time for this. We do not wish to go down that road," the minister said.
The government's endeavour was to protect MSMEs, which contribute 29 percent to the country's GDP (gross domestic product), from the coronavirus-induced crisis.
"We have decided to raise (turnover) limits for MSMEs. An order to this effect should hopefully be out in 8-10 days, which will naturally enhance their coverage," Gadkari said.
The Union Cabinet had in 2018 approved changes in the basis of classifying micro, small and medium enterprises from "investment in plant & machinery/equipment" to "annual turnover".
The MSME ministry had said that section 7 of the Micro, Small and Medium Enterprises Development (MSMED) Act, 2006 will be amended to define units producing goods and rendering services in terms of annual turnover.
Under the new definition, a micro enterprise will be defined as a unit where the annual turnover does not exceed five crore rupees; a small enterprise will be defined as a unit where the annual turnover is more than five crore rupees but does not exceed Rs 75 crore, and a medium enterprise will be defined as a unit where the annual turnover is more than seventy-five crore rupees but does not exceed Rs 250 crore.
Observing that this was a difficult time from an economic standpoint, the minister said he believes this could turn out to be a "blessing in disguise" for India's micro, small and medium enterprises (MSMEs)".
Citing the examples of countries like Japan and US who desire to shift their investments out of China and set up industries elsewhere, Gadkari said India was the only nation which can take an advantage out of this situation.
"We have insured loans given to MSMEs by paying a premium of 1.5 percent to banks on loans amounting to a total of Rs 1 lakh crore and taken 75 percent guarantee while the banks have to bear 25 percent of the collateral.
"Obviously, we are trying to reduce the collateral limit. We will also ask the finance ministry to increase the limit of the quantum of loans to Rs 5 lakh crore from Rs 1 lakh crore, so that it is easier for MSMEs to avail credit," Gadkari said.
COVID-19 update: India reports 2,841 new cases, nine deaths in last 24 hours, active cases dip to 18,604
The fresh COVID-19 infections reported on Friday were marginally higher than 2,827 cases logged on Thursday. The daily positivity rate was recorded at 0.58 per cent, while the weekly positivity rate was 0.69 per cent
India logs 2,202 new COVID-19 cases in last 24 hours, down 11.45% from day ago; daily positivity rate up at 0.74%
India now has 17,317 active cases of COVID-19, a decline of 375 cases in the active caseload in a span of 24 hours. The active cases now comprise of 0.04 per cent of the total infections
The Drugs Controller General of India (DCGI) had granted permission in March for conducting Phase-3 clinical trial of Covovax as a booster dose in adults