In 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. Also, the package announced is estimated to be 10 per cent of India’s GDP. At the same time, it is a supporting key to all businesses after Covid-19.
To regain economic power amidst the pandemic, the relief packages announced 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 ongoing economic ramifications, the ABA policy ensures that it doesn’t leave any sector untouched by the revival, particularly in MSMEs, which are the heart of the economy.
Who is eligible to avail of the benefits of ABA?
The Aatmanirbhar Bharath 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, the MSMEs get to grow in size and enjoy the benefits. However, the elaboration on relief measures taken under ABA provides five important takeaways.
MSME Redefined
The government altered the definition of MSMEs to offer great support and benefits. Earlier, the authorities defined the MSMEs only based on the investments. Now, in contrast, they will be described as a composite matter of considering both investment and turnover. The table given below highlights the differences.
Extension of Emergency Credit Line for MSMEs
To begin all the operations post-pandemic, the Government offers Rs.3Lakh crores as additional funding. Lenders provide this collateral-free automatic loan to MSMEs with a tenure of 4 years along with a 12-month moratorium on the principal. No guarantee fee is levied on additional collaterals, and the Government covers 100% of the credit as a guarantee through banks. It is estimated that around 45Lakh business units in India benefit, and the scheme will be open until October 31, 2020.
Debt Value to NPA or Stressed MSMEs
The Aatmanirbhar Bharath Abhiyan provides an additional debt of Rs. 20,000 crores to the MSMEs categorized as NPA or stressed. Considering the valuables provided to the Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE), we offer a partial credit guarantee of Rs. 4,000 crores to the banks. Expect banks to provide this fund as infused money for the equity given to the enterprises.
Equity Infusions
The Government also provides equity funding for the potential growth under the introduced reform policy called “Fund of Funds.” With a 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 of 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 for Aatmanirbhar Bharath Abhiyan are yet to be announced, there is one primary thing you need to do beforehand. Start your business project report. Project reports are one of the determining factors to take your application forward.
Generally, the report will give an overview of the company. For example, current status of the projects, the number of employees, the budget for each project, balance sheets, expenditures, employee salaries, taxation, etc. With the perfect project report, there is a high probability that you may have a 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. You can create a powerful project report in ten minutes. That too in your language. Also,all public and private sector banks working in India accept our project report. Click to create your report.