PM Modi’s ‘Diwali gifts’ for small businesses include 59-minute loans

New Delhi: In a major boost to Micro Small and Medium Enterprises (MSMEs), Prime Minister Narendra Modi on Friday launched a 59-minute loan programme and other moves to help small businesses as part of the centre’s “support and outreach initiative” for micro, small and medium enterprises (MSMEs) in New Delhi.

“Loan requests for up to Rs. 1 crore will be cleared in about the same time it takes for your morning commute,” he said.

The programme was unveiled as part of 12 new decisions to aid the sector which, the PM said, were like “Diwali gifts for MSMEs”.

The announcement is a counter to overtures to small businesses already made by the opposition Congress. Party chief Rahul Gandhi said in August he would seek to shift the focus of the country’s economic policy towards supporting small and medium-sized firms if the opposition won power in next year’s election.

“As we speak, somewhere in the country your entrepreneurial brother or sister is getting a loan… sanctioned in just 59 minutes,” PM Modi said. “Think, only 59 minutes. Just 59 minutes.”

Talking of India jumping 23 places on the World Bank’s latest ‘Ease of Doing Business’ ranking, he said in four years his government has achieved what many did not believe and what no other nation has done — leaping from 142nd rank in 2014 to 77th position. Breaking into top 50 rank is not far away, he added.

Here are the 12 key announcements made by PM Modi for MSME sector:

  1. PM Modi announced the launch of 59-minute loan portal for sanction of up to Rs 1 crore for small and medium enterprises. He said, “I dedicate 59-minute loan approval portal to you and it has started benefiting the MSMEs businessmen already.”
  2. The Prime Minister also said that the GST-registered MSMEs will get 2% rebate on an incremental loan of up to Rs 1 crore.
  3. Talking about the Interest subvention, PM Modi said the government has decided to increase interest Subvention on pre and post shipment credit for exports by MSMEs from 3% to 5%.
  4. “It is now mandatory that all the companies with a turnover of more than Rs 500 crore will have to join TReDS platform, that is Trade Receivables e- Discounting System. So that MSMEs doesn’t face trouble in cash flow,” PM Modi said.
  5. PM Modi said that mandatory sourcing by PSUs from MSMEs increased to 25% from the previous limit of 20%.
  6. He said that government companies to buy at least 3% of their purchases from women entrepreneurs.
  7. “It has been made mandatory for the companies to take GeM (Government e-Marketplace) membership now. Not only this, but the companies will now register its all MSME vendors on this platform, which will also benefit the MSME,” he said.
  8. Modi announced Rs 6000 crore package for the technological upgradation in connection with MSME. 20, 000 hubs and 100 tool rooms will be developed around the country for this, he said.
  9. PM Modi also announced MSME sector’s ease of doing business to pharma companies. Reform of processes will help small and medium enterprises (MSMEs), he said.
  10. He announced Environment clearance and ease of self-certification.
  11. “MSMEs will have to file just one annual return on eight labour laws and 10 central rules,” he said.
  12. Modi announced that the govt has made a big change to Companies Act and provided relief to MSMEs from legal complications.