1. Govt considering measures to boost MSMEs: The central government is considering a slew of measures to boost Indian micro, small and medium enterprises (MSMEs).It may include policy measures to integrate them with international markets, digital support for global competitiveness, ease of compliance with GST laws, and providing low-cost credit.
2. The measures are expected to be announced in the interim budget on February 1. It is likely that the government may announce its intent in the interim budget, but details of the schemes could be unveiled later in the full budget for 2024-25 by July.
3. The high cost of credit is the single biggest roadblock in the growth of MSMEs. MSMEs account for 90% of businesses, 60% to 70% of employment and 50% of GDP worldwide.
4. The Emergency Credit Line Guarantee Scheme (ECLGS) helped a fraction of the 6.5 crore MSMEs as it supported only those who had existing loans. By January 31, guarantees amounting to ₹3.61 lakh crore were issued under ECLGS, benefiting 1.19 crore borrowers.
5. A micro-unit is an enterprise where investments in plant and machinery do not exceed ₹1 crore, and turnover does not exceed ₹5 crore. In the case of a small enterprise, investment in plant and machinery should not exceed ₹10 crore and turnover should not exceed ₹50 crore. Medium enterprises are those where investment in plant and machinery does not exceed ₹50 crore and turnover does not exceed ₹250 crore.
by Dr.CA.RAJ CHAWLA
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