Narendra Modi says announcements made by Nirmala Sitharaman will address problems of MSMEs, empower entrepreneurs

New Delhi: Prime Minister Narendra Modi on Wednesday said announcements made by finance minister Nirmala Sitharaman will go a long way in addressing the issues faced by MSMEs and the steps will also empower entrepreneurs.

"Today's announcements by FM will go a long way in addressing issues faced by businesses, especially MSMEs. The steps announced will boost liquidity, empower the entrepreneurs and strengthen their competitive spirit," the prime minister said in a tweet.

Sitharaman on Wednesday announced a series of liquidity measures for millions of small businesses reeling under the impact of COVID-19 lockdown, including collateral-free automatic loans worth Rs 3 lakh crore.

File image of Prime Minister Narendra Modi. PTI

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Borrowers with up to Rs 25 crore outstanding and Rs 100 crore turnover will be eligible. These loans will have a four-year tenure and have a moratorium for 12 months on principal payment.

There will be a 100 percent credit guarantee cover to banks and non-banking finance companies on principal and interest. The scheme can be availed till 31 October.

The government has also reduced the statutory Employees Provident Fund (EPF) contribution of private-sector employers and employees from the current mandated 12 per cent to 10 per cent for the next three months.

Sitharaman also announced a Rs 30,000 crore special liquidity scheme for non-banking finance companies (NBFCs), housing finance companies (HFCs) and micro-finance institutions (MFIs).

The announcements came a day after the Prime Minister announced a comprehensive Rs 20 lakh crore special economic package to help various sections in dealing with the challenges posed by COVID-19. He gave a clarion call for making India self-reliant.