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MSME Sector

Government Has Now Changed The Definition Of MSME Sector, New Norms To Be Activated In July

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As Government has announced the relief of 20 Lakh Crore on the 13th of May for the MSME Sectors, it had boosted their Economy to a greater extent.

But now the Cabinet Committee of Economic Affairs … by Hon’ble Prime Minister Mr. Narendra Modi has revised the classification criteria of the MSME Sector. In the meeting of CEA, the committee has discussed its strategy to reduce the importing capacity in the major field, enhancing the production capacity.

Now as per the new norms, a unit of 50 crore Investment and 250 crore of Turnover will fall under the Medium Inter Price category and manufacturing service unit with 1 crore of Investment and 5 crore Turnover will be classified as Micro and a unit enhancing 10 crore of Investment and 50 crore of Turnover will be categorized as Small Enterprise.

Now with the new norms, there will be no difference between the Manufacturing and Service sector.

An official statement has been released stating that- “This is expected to exponentially add to exports from the Country leading to more growth and economic activity that will directly boost the Creation of Jobs.”

This new categorization will come into effect from July 1st. The existing criteria of categorization are based on the MSMED Act 2006.

PM has strictly ordered the officials to cut down the import of AC, especially split AC. The report has shown that 60-70% of the compressor of these AC’s are being imported from the other Countries. So boosting the production of these compressors will enhance the Economic pace.

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loan for the msme project

Loan for the MSME Project

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On the basis of a current business world buzz, the Worldbank has recently come up with a brand new initiative. According to this, a financial help related deal has been made to give a Loan for the MSME Project.

CORONA Virus has juggled our lives. The impact is deeply felt by people from all walks of life. All sorts of sectors are heavily influenced by the market downfall as the pandemic is booming. COVID19 pandemic’s impact on MSME is really devastating. The Micros, Small and Medium Enterprises are the building blocks for a developing nations’ economy. An MSME license provides Government support in the form of incentives, subsidies and a lower rate of interest.

MSME plays an important role in India’s GDP. It contributes about 30% of India’s GDP. This loan is basically for reconstruction and development. It will help to confront with pandemic and help 1.5 million MSME in liquidity and credit needs. The maturity period of this loan is 19 years with a 5 year grace period.

The Worldbank has approved a loan 750 million for MSME and is thus supporting India’s emergency response for COVID19 and new projects. This is the third time when the Worldbank is extending its support for India. The first was in April for India’s health sector, then in May to increase cash transfer and now for MSME Development. This loan will help the project to withstand the impact of COVID and protect millions of jobs in India.

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