Various SOPS announced by the Hon’ble Prime Minister Mr. Narendra Modi on the eve of New Year in the speech include enhancement of the credit guarantee limit for Micro, Small and Medium Enterprises (MSMEs) from Rs 1 crore to Rs 2 crore including NBFCs will give much needed credit liquidity to the stressed MSMEs. He has further asked banks to increase working capital loans from 20% to 30% for enterprises that transact digitally. He has also raised cash credit limit for small business to 25% from 20%. This will help MSMEs in light of credit crunch being faced post demonetization.
Various SOPS given to farmers, small traders along with enhanced cash withdrawals are some of the welcome features pronounced by Hon’ble Prime Minster Mr. Narendra Modi said Mr. Vijay Kalantri, President, All India Association of Industries (AIAI).
However AIAI feels there is a strong need to review and push various incentives to MSMEs that are pending since long. These should be expedited at the earliest as MSMEs are the vibrant sector and the backbone of the Indian economy.
The additional credit of Rs. 20,000 crore made available to National Bank for Agriculture and Rural Development (NABARD) for farmers is a welcome step. The interest subsidies given to farmers for availing loans from District Cooperative Banks and primary agriculture cooperative societies is an important feature to cash starved farmers.
However, there is urgent need to review cash withdrawal limit for small manufacturing units to meet the need of raw material purchase and labour payments stressed Mr. Kalantri.
These measures will help micro and small sectors reducing regional imbalances and productivity.