Centre taking special steps to boost growth of MSMEs

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Centre taking special steps to boost growth of MSMEs

New Delhi, Dec 14 (IANS): The Centre is taking special steps to boost the growth of Micro, Small and Medium Enterprises by easing rules to facilitate the ease of doing business and providing them better access to credit for expanding their business operations, according to an official statement issued on Sunday.

The Centre’s Bureau of Indian Standards, which implements Quality Control Orders (QCOs) issued by various ministries, gives special exemptions and relaxations for MSMEs, to ensure that the QCOs do not disrupt domestic production, the statement said.

Some of the key relaxations and exemptions include additional 3 to 6 months extension in time for Micro and Small Enterprises (MSEs) and exemption for imports by domestic manufacturers for producing export-oriented products.

Exemption for import of up to 200 units for Research & Development purposes and provision for clearance of legacy stock (manufactured or imported before implementation) within six months from the effective date are other relaxations that have been provided for MSMEs.

BIS has also implemented financial and technical relaxations to MSME sector which include concessions ranging from 10 of 80 per cent in annual minimum marking fee with concession. An additional concession of 10 per cent is also provided to enterprises which are either located in north-east areas or women entrepreneur MSME units.

Besides, the requirement of maintaining in-house laboratory has been made optional for MSME units. MSME units are allowed to utilize the services of outside BIS recognized laboratories, NABL accredited labs or even sharing of resources like cluster based labs or laboratories of other manufacturing units. The ‘Levels of Control’ in the Scheme of Inspection and Testing (SIT) are made recommendatory in nature. The manufacturer has the choice to define their own control unit/batch/lot and their own Levels of Control and inform the BIS.

BIS has also made the product certification process guidelines publicly available on the BIS website and is issuing product-wise manuals as guidance documents for conformity assessment as per various Indian Standards.

With a view to improve monetary policy transmission, banks have been advised by Reserve Bank of India to link loans to MSMEs to an external benchmark. The reset clause for loans has been reduced to three months under the external benchmark system. Further, to make the benefit of external benchmark-based interest regime available to the existing borrowers, banks have been advised to provide a switchover option as per mutually agreed terms. Further, RBI also took various other measures for improving credit flow to the MSME sector such as the Mutual Credit Guarantee Scheme for MSMEs This scheme offers a credit guarantee, making it easier for MSMEs to obtain loans, especially for purchasing essential equipment and machinery. The Scheme provides credit guarantee cover to lenders (Scheduled Commercial Banks, All India Financial Institutions, NBFCs) for their term loans up to Rs.100 crore to MSMEs for their projects involving purchase of equipment and machinery.

Schedule Commercial Banks have also been mandated not to accept collateral security in the case of loans up to ₹10 lakh extended to units in the MSE sector to provide them easier access to credit in order to help them expand business.

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Source: IANS