(By CA Prince Jain, Ex KPMG, Currently Partner in Jain Prince & Co; Edited by Fab Gyan)
Finance Minister has announced multiple financial benefits for the growth of MSME sector. It has also been clarified by Finance Minister that Startups can also enjoy the benefits of MSME Package.
Benefits Announced for MSME in Financial Package
Fund of Fund for Equity Infusion of 50000 Crores in MSME
Start-ups who are in dire need of investment in the form of Equity can be immensely benefited from this announcement. As per the Scheme:
Investment will be in the form of Equity in MSME who have growth Potential.
A Mother Fund will be created with an investment of Rs 10,000 Crores who in turn will leverage total investment of Rs 50,000 Crores at Daughter Fund Level .
Will Encourage to get them listed on Stock Exchanges.
Rs 3 Lakhs Automatic Collateral Free Loans to MSME by Banks/NBFCs
Automatic Emergency Credit Line to the tune of 20% of Entire Outstanding Credit as on 29.02.2020.
Loans to have Four Year Tenure with 12 months Moratorium on principal Payment.
Can be availed up to 31st October, 2020.
No Guarantee Fee/No Fresh Capital
Rs 20,000 Crores Subordinate Debt to Stressed/NPA MSME
Central Government Partial Guarantee Scheme (CGT-MSE) to give Loans up to 20,000 Crores to promoters of MSME who in turn invest the amount in MSME as Equity.
Other Benefits
Replacement of existing trade fairs & exhibition systems through E-Market linkage.
Settlement of pending dues to MSME Vendors within 45 days by PSU and Government.
Ban on Global Tender up to the Amount of Rs 200 Crores by Government.
Registration Process of MSME
All classes of enterprises, whether Proprietorship, Hindu undivided family, Association of persons, Co-operative society, Partnership firm, Company or Undertaking, by whatever name called can apply for the registration .
One has to apply with Ministry of MSME for getting it registered.
Documents Required for Registration
Other Information Required Name of Enterprise, Location of Plant if any, Major Activity, No. of Persons Employed, Investment in Plant & Machinery, Annual Turnover etc.
Revision in Criteria of MSME
Time Frame to Get Registration
1-2 working days, if all documents and information is available.
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