Govt. launches updated Credit linked Capital Subsidy Scheme

Union Minister for Micro, Small and Medium Enterprises Nitin Gadkari launched the updated Credit linked Capital Subsidy Scheme (CLCSS) to allow micro, small and medium enterprises (MSMEs) access to capital. Union Minister re-Launched the Credit Linked Capital Subsidy (CLCS) web portal during the 2-day workshop on ‘Credit Linked Capital Subsidy and Delayed Payment of MSMEs’ held at New Delhi.

During the course of workshop Memorandum of Understandings (MoUs) was also signed by office of Development Commissioner (MSME), Ministry of MSME with 11 Nodal Banks.

About Credit linked Capital Subsidy Scheme

It provides 15% subsidy for additional investment up to Rrs.1cr. for technology upgradation by MSMEs in the specified 51 sub-sectors. Now in relaunched scheme there is an additional 10% subsidy to SC-ST entrepreneurs while special provisions have been made for 117 ‘aspirational’ districts, northeastern region and hill states.

In February 2019, Cabinet Committee on Economic Affairs (CCEA) approved an outlay of Rs.2,900 crore for CLCSS scheme. Now, it is a demand-driven one without any upper limit on overall annual spending on subsidy disbursal.

Significance: CLCSS scheme would be crucial in raising MSME contribution to gross domestic product (GDP) from current 29% to 50%, in addition to increasing exports from sector to 50% from 40% now.

Steps taken by Government to solve long standing problems of MSME sector

Government will soon implement the recommendations of UK Sinha committee. It suggested Rs.5,000-crore stressed asset fund (SAF) for domestic MSMEs hurt by demonetisation, Goods and Service Tax (GST) and an ongoing liquidity crunch. It also suggested to make PAN numbers a ‘Unique Enterprise Identifiers’ for procurement, availing government sponsored benefits, and other purposes.

Centre appealed all stakeholders to use MSME Samadhan Portal so that sufficient data could be gathered about wilful defaulters, register themselves on stock exchanges. MSME ministry will soon launch ‘Bharat Craft’, a marketing portal for marketing of their products.

Ministry has already notified that all companies registered with Companies Act, 2013 with a turnover of more than Rs.500 crore and all Central Public Sector Enterprises (CPSEs) shall be required to get themselves on boarded on TReDS (Trade Receivables Discounting System) platform which is set up as per notification of Reserve Bank of India (RBI).

Due Payments: Ministry has also notified that all companies who get supplies of goods or services (G&S) from Micro and Small Enterprises and whose payments to suppliers exceeds 45 days from date of acceptance of G&S, shall submit a half yearly (6 months) return of Union Ministry of Corporate Affairs (MCA) stating the amount of payments due and reason of delay.

Month: Current Affairs - September, 2019