Self-Reliant India Mission is On: MSMEs have to keep their Project Reports Ready
On his fifth address to the nation, Prime Minister Narendra Modi launched Atma-Nirbhar Bharat Abhiyan(ABA). The objective of this ‘Self-Reliant India Mission’ is to bring a special economic package that will offer relief measures across all the sectors in the country. The package announced is estimated to be 10 percent of India’s GDP. At the same time, it is a supporting key to all businesses after Covid-19.
To regain the economic power amidst the pandemic, the relief packages announced with the total amount whooping Rs.20 lakh crore. Finance Minister, Nirmala Sitaraman, addressed the fiscal policies and relief measure that comes under this package. With the on-going economic ramifications, the ABA policy guarantees that no sector is untouched with the revival, especially in MSMEs, the heart of the economy.
Who are eligible to avail of the benefits ABA?
The Atma-Nirbhar Bharat Abhiyan has mapped out a clear plan for the Micro, Small and Medium Enterprises (MSME). These enterprises employ almost 40% of all the employees in India. Thus all the owners, laborers, and workers who are part of the Indian MSMEs greatly benefit from the new ABA policies. This will majorly include the Manufacturing and Services enterprises but not limited to the industries, plants, and machinery-dependent management. Importantly, even the stressed enterprises are included under the scheme.
Thus, with the new reforms, now the MSMEs get to grow in the sizes and enjoy the benefits. Here are the five important takeaways from the elaboration on relief measures taken under ABA.
MSME get their definition altered to offer great support and benefits. Earlier the MSMEs were defined only based on the investments. Now, in contrast, they will be described as a composite matter of considering both investment and also turnover. The differences highlighted in the table given below.
Extension of Emergency Credit Line for MSMEs
To begin all the operations post-pandemic, the Government offers Rs.3Lakh crores as an additional funding. This is a collateral-free automatic loan provided to MSMEs with the tenure of 4 years along with the moratorium of 12 months on the principal. There is no guarantee fee levied on additional collaterals, and there is 100% grantee credit covered by the Government through banks. It is estimated that around 45Lakh business units in India benefit, and the scheme will be open until October 31st, 2020.
Debt Value to NPA or Stressed MSMEs
Atma-Nirbhar Bharat Abhiyan provides additional debt of Rs.20000 crores to the MSMEs, which are categorized as NPA or stressed. A partial credit guarantee to the banks is offered with the Rs.4000 crores considering the valuables given to the Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE). Banks are expected to provide this fund as infused money for the equity given to the enterprises.
The Government also provides equity funding for the potential growth under the introduced reform policy called “Fund of Funds.” With the corpus amount of Rs.10000 crore, the Mother fund and Daughter Funds leveraged for MSMEs. This is bringing an opportunity for companies to enlist them on the Stock Exchange.
Global Tenders Dissolved
By making amendments to the General Financial Rules, the Government has disallowed the Global tender up to Rs.200 crores. As a measure to promote Make-In-India and also to save Indian ventures from foreign competitors, this policy has become one of the primary agenda under ABA.
How do MSME owners apply for the ABA funding?
Even though the details of the application are yet to be announced, there is one primary thing you need to do beforehand. Get started with the project report of your business. Project reports are one of the determining factors to take your application forward.
Generally, the report will give an overview of the company. This will include the current status of the projects, number of employees, budget for each project, balance sheets, expenditure, employee salaries, taxation, etc. With the perfect project report, there is a high probability that you may have successful funding or loan process/
If you have never created a project report before, then don’t worry. You can find the right tool for creating one. Check Finline, a platform that allows you to create a project report. Based on the industry background, you can choose a template for creating the report or get assisted by the experts for the team. Now you can create a hassle-free, successful project report from anywhere.