Lok Sabha Question No. 1686 (UNSTARRED), answered on 2024-12-05
Subject: Financial and Operational Challenges to MSMEs
Ministry: MICRO, SMALL AND MEDIUM ENTERPRISES
Asked by: Shri Anurag Sharma

## GOVERNMENT OF INDIA MINISTRY OF MICRO, SMALL AND MEDIUM ENTERPRISES

## LOK SABHA UNSTARRED QUESTION NO. 1686 TO BE ANSWERED ON 05.12.2024

## FINANCIAL AND OPERATIONAL CHALLENGES TO MSMEs

1686. SHRI ANURAG SHARMA:

Will the Minister of MICRO, SMALL AND MEDIUM ENTERPRISES be pleased to state:

- (a) the details of policies in place to help MSMEs overcome financial and operational challenges, particularly in the post-pandemic economic environment; and
- (b) whether any new initiative have been taken to expand access to credit for small businesses, if so, the details thereof?

## ANSWER

## MINISTER OF STATE FOR MICRO, SMALL AND MEDIUM ENTERPRISES (SUSHRI SHOBHA KARANDLAJE)

- (a): Government  has  taken  various  steps  for  MSMEs  to  overcome  financial  and  operational challenges, particularly in the post-pandemic economic environment. Some of them are as follows:
- (i) From  23.05.2020  to  31.03.2023,  the  Government  implemented  Emergency  Credit  Line Guarantee Scheme (ECLGS), for businesses, including MSMEs, as a part of Aatma Nirbhar Bharat Package.1.19 crore number of guarantees have been issued to businesses, including MSMEs,  amounting  to  Rs.3.68  lakh  Crore.  Out  of  the  total,  1.13  crore  guarantees amounting  to  Rs.  2.42  lakh  crore  have  been  provided  to  MSMEs.  State  Bank  of  India's research report dated 23.01.23 on ECLGS, indicates that almost 14.6 lakh MSME accounts were  saved  due  to  ECLGS  scheme  from  becoming  NPA,  of  which  about  93.8%  of  the accounts were in Micro and Small category.
- (ii) Rs. 50,000 crore equity infusion through Self Reliant India (SRI) Fund.
- (iii) New revised criteria for classification of MSMEs.
- (iv) No global tenders for procurement up to Rs. 200 crore.
- (v) Launching  of  an  online  Portal  'Champions'  in  June,  2020  to  cover  many  aspects  of  egovernance including grievance redress and handholding of MSMEs.
- (vi) Non-tax benefits extended for 3 years in case of an upward change in status of MSMEs.
- (vii) Launch of Udyam Assist Platform on 11.1.2023 to bring Informal Micro Enterprises (IMEs) under the formal ambit for availing the benefits under Priority Sector Lending.
- (viii) Mandatory for all Central Government Ministries/ Departments/ CPSUs to procure at least 25% of their annual procurement from MSEs, including 3% from MSEs owned by women entrepreneurs.

: 2 :

- (ix) Inclusion of  Retail and Wholesale traders as MSMEs w.e.f. 2.7. 2021.
- (x) During  FY  2023-24  Credit  Guarantee  Scheme  for  Micro  and  Small  Enterprises  was revamped through infusion of Rs. 9,000 Crore in the corpus of Credit Guarantee Fund Trust for  Micro  and  Small  Enterprises  (CGTMSE)  which  enabled  facilitation  of  additional collateral-free guaranteed credit.
- (b): Union  Budget  2024-25  announced  a  package  covering  financing,  regulatory  changes  and technology support for MSMEs to grow and also compete globally. The details are given below:
-  Credit Guarantee Scheme for MSMEs in the Manufacturing Sector;
-  New assessment model for MSME credit;
-  Credit Support to MSMEs during Stress Period;
-  Enhancement in Mudra Loans limit from Rs. 10 lakh to 20 lakh;
-  To facilitate working capital requirement of MSMEs by converting their trade receivables into  cash  the  Government  has  notified  to  reduce  the  turnover  threshold  of  buyers  for mandatory on-boarding on the TReDS platform from Rs. 500 crore to Rs. 250 crore. In this regard notification in The Gazette of India No.CG-DL-E-07112024-258523 dated 07.11.2024 has been issued.
-  New SIDBI branches in MSME clusters for access of credit facility;
-  MSME Units for Food Irradiation, Quality & Safety Testing;

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