Revamped credit scheme for MSMEs, startups

Vijay C Roy

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Chandigarh, February 1

Giving a push to micro, small and medium enterprises (MSMEs) and startups, Finance Minister Nirmala Sitharaman on Wednesday announced a slew of initiatives to empower both the sectors.

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MSMEs are growth engines of our economy. Micro enterprises with a turnover of up to Rs 2 crore and certain professionals with turnover of up to Rs 50 lakh can avail the benefit of presumptive taxation. Nirmala Sitharaman, Finance Minister

The Finance Minister announced a revamped credit guarantee scheme for MSMEs. This may see an infusion of around Rs 9,000 crore into the corpus. The new credit guarantee scheme is expected to lower cost of credit by 1% and allow MSMEs to avail additional collateral-free credit guarantee of Rs 2 lakh crore.

Also, 95% of the securities of MSMEs lost during the non-compliance of orders during the Covid will be refunded by the government. “In cases of failure by the MSMEs to execute contracts during the Covid period, 95% of the forfeited amount relating to bid or performance security will be returned to them by the government and government undertakings. This will provide relief to the MSMEs,” she said.

She further said, “MSMEs are growth engines of our economy. Micro enterprises with a turnover of up to Rs 2 crore and certain professionals with turnover of up to Rs 50 lakh can avail the benefit of presumptive taxation. I propose to provide enhanced limits of Rs 3 crore and Rs 75 lakh, respectively, to the taxpayers whose cash receipts are no more than 5%. ”