As announced by our Hon’ble PM yesterday that Rs. 20 lakh crore has been allotted to help the needy and small businesses and today our Hon’ble Finance minister announced various relief measures to allocate this amount.
There were also some direct tax relief measures announced along with this.
Now one of the most important thing is that a new definition of MSME has been introduced wherein there is no difference between manufacturing and service industry as it was earlier.
Revised MSME Classification:
Micro: Investment less than 1 crore and turnover Less than 5 crore.
Small: Investment less than 10 crore and turnover Less than 50 crore.
Medium: Investment less than 20 crore and turnover Less than 100 crore.
Existing MSME classification:
Micro: Investment less than 25 lakh.
Small: Investment less than 5 crore.
Medium: Investment less than 10 crore.
Fore service sector:
Micro: Investment less than 10 Lakh.
Small: Investment less than 2 crore.
Medium: Investment less than 5 crore.
Thus, as we can see there has been a significant increase in the limits also a new criteria of turnover has been added.
As far as liquidity is concerned Rs 3 lakh crores Collateral free Automatic Loans for Businesses, including MSMEs has been allotted because of which Emergency Credit Line to Businesses/MSMEs from Banks and NBFCs up to 20% of entire outstanding credit as on 29.2.2020.
1. Borrowers with up to Rs 25 crore outstanding and Rs 100 crore turnover eligible
2. Loans to have 4 year tenor with moratorium of 12 months on Principal repayment
3.Interest to be capped
4. 100 credit guarantee cover to Banks and NBFCs on principal and interest
5. Scheme can be availed till 31 st Oct 2020
6. No guarantee fee, no fresh collateral.
Thus, looking at this it feels that only the persons who have existing loan would be eligible for this benefit and not the people who were doing business with their own money and because of which the whole purpose of atmanirbhar bharat would be defeated because people who were atmanirbhar are not helped in these times.
To read full relief package CLICK HERE.