Friday, December 13, 2019

MSMEs get only Rs 40 Crore of Rs 625 crore interest subsidy


Micro small and medium enterprises (MSME) had only received a total of mere 30 to 40 crores earmarked as 2% subsidy a year after Government just announced the scheme for the registered enterprises to pay the goods and service tax (GST).
The scheme works in
  1. ·       Available to MSMEs with GSTN number and UDYOG ADHAAR number.
  2. ·       Loans taken between November 2018 and march 2019 are eligible.
  3. ·       1 crore is coverage limited.
  4. ·       Interest subsidy under export finance ineligible by MSMEs exporters.
  5. ·       No subsidy for small businesses getting similar benefit.

SIDBI the financial institution which is responsible for implementing the scheme, had not contacted till Thursday. The interest subvention scheme, announced November, is only meant to provide the subsidy on incremental and working capital loans taken from banks during the 2018-19 and 2019-20. The government allocated 275 crores for the last financial year and another 375 crores for the current financial year. As before the general elections in the coming months, the scheme is seen to be a payback by the government as the impact of the demonetisation on MSMEs. The conditions made it difficult to avail the benefits by the small enterprises. Government pushes public sector undertakings to clear the pending bills of MSMEs.
It had estimated a total sum around Rs 40000 crores and at least Rs 15000 is unpaid bill. The small business is getting harder to avail credit facility due to these unpaid bills and that especially from non-bank finance companies. The finance ministry assurance, the government is unable or they have the difficulty to put pressure on the corporate sector. Even the decision to link the GST network, where data on revenue of the companies and these small enterprises are available.
Trade electronic receivables discounting system (TReDS) has been discussed for over a year and a half, the Government has failed to put in place with the accurate tracking payments and data of MSMEs available. So far, the ministry has collected data of the unpaid bills and dues of the companies and sought that the companies can pay these dues as early as possible.


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