Lok Sabha Question No. 8 (UNSTARRED), answered on 2024-11-25
Subject: Initiatives to Support MSMEs
Ministry: CORPORATE AFFAIRS
Asked by: Dr. Bhola Singh

8.  Dr. Bhola Singh:

Will the Minister of CORPORATE AFFAIRS be pleased to state:

- (a)     whether the Government has introduced any initiatives to support Micro, Small, and Medium Enterprises (MSMEs) recently in accessing credit under the Companies Act;
- (b)     if so, the details thereof including the provisions made for MSMEs to address financial challenges and ease of doing Business;
- (c)     whether the Government has monitored the effectiveness of these initiatives; and
- (d)     if so, the outcomes observed so far in supporting MSMEs across the country?

## ANSWER

THE MINISTER OF STATE IN THE MINISTRY OF CORPORATE AFFAIRS AND MINISTER OF STATE IN THE MINISTRY OF ROAD, TRANSPORT AND HIGHWAYS

[ SHRI HARSH MALHOTRA]

(a) to (d ):-The  Government has taken a number of initiatives  to support MSMEs to address financial challenges, in accessing credit and for Ease of Doing Business  as given below:

## GOVERNMENT OF INDIA MINISTRY OF CORPORATE AFFAIRS

## LOK SABHA

ANSWERED ON MONDAY, NOVEMBER 25, 2024

UNSTARRED QUESTION NO. 8 AGRAHAYANA 4, ,1946 (SAKA)

## INITIATIVES TO SUPPORT MSMEs QUESTION

- (i) Credit  Guarantee  Scheme  for  Micro  and  Small  Enterprises, through  Credit  Guarantee  Fund  Trust  for  Micro  and  Small Enterprises, provides guarantee to its Member Lending Institutions (MLIs) for the credit extended by them to Micro and Small Enterprises. Collateral free loan up to a limit of Rs. 500 lakh to Micro and Small Enterprises, with a guarantee coverage up to 85  %  for  various  categories  of  loan  is  provided  under  Credit Guarantee Scheme. Since inception of the scheme till 31.10.2024, 97.68 lakh guarantees were approved involving an amount of Rs.
- 7.57 lakh crore.
- (ii) Prime Minister's Employment Generation Programme (PMEGP) is a major credit-linked subsidy programme which aims at generating self-employment  opportunities  through  establishment  of  microenterprises in the non-farm sector by helping traditional artisans and rural/urban unemployed youth. A loan of upto Rs. 50 lakh for manufacturing  sector  and  Rs.  20  lakh  for  service  sector  is provided under the scheme.
- (iii) PM Vishwakarma Scheme provides end-to-end support to artisans and  craftspeople  including  credit  support  at  5%  interest  rate along with guarantee coverage.
- (iv) Trade Receivables Discounting System (TReDS) has been operationalized to address the problem of delayed payments to MSMEs.
- (v) The  Government  has  introduced  MSME  Form  I  for  reporting outstanding  payments  beyond  45  days    to  Micro  and  Small enterprises by companies, promoting prompt payment to MSMEs, and ensuring transparency in transactions involving small vendors and suppliers.
- (vi) Rs.  5  lakh  crore  Emergency  Credit  Line  Guarantee  Scheme (ECLGS), for businesses, including MSMEs was announced as a part of Atmanirbhar Bharat package. A total of 1.19 crore number of guarantees were issued to businesses, including MSMEs. Of this, 1.13 crore guarantees amounting to Rs. 2.42 lakh crore were issued  to  MSMEs.  State  Bank  of  India's  research  report  dated

23.01.2023  on  ECLGS,  indicates  that  almost  14.6  lakh  MSME accounts were saved due to ECLGS Scheme (including restructured)  from  becoming  NPA,  of  which  98.3%  of  the accounts were in micro and small category. (vii) New revised criteria for classification of MSMEs based on both investment size and turnover has been issued. (viii) New  registration  of  MSMEs  through  ''Udyam  Registration''  for Ease of Doing Business. (ix) No global tenders for procurement up to Rs. 200 crore. (x) Inclusion  of  retail  and  whole  sale  trades  as  MSMEs  w.e.f. 02.07.2021. (xi) Non-tax  benefits  extended  for  3  years  in  case  of  an  upward change in status of MSMEs. (xii) Under Vivad se Vishwas - I, relief by way of refund of 95% of the deducted  performance  security,  bid  security  and  liquidated damages was provided to  MSMEs.  Relief  was  also  provided  to MSMEs debarred for default in execution of contracts. Launch  of  Udyam  Assist  Platform  to  bring  the  Informal  Micro Enterprises under the formal ambit for availing the benefit under

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- (xiii) Priority Sector Lending.