SMEs–Government Initiatives to help them –The Economic Times–24.03.2018

The government is working on structuring a twomonth programme, leveraging data captured by the GST Network, to apprise small businesses of the schemes it has implemented to support them and handhold them to avail of those, senior officials said.

GSTN, a not-for-profit non-governmental organisation that manages the entire IT system of the goods and services tax portal, has more than 95 lakh micro, small and medium enterprises (MSMEs) listed on it.

The decision the launch the outreach programme was made over the past few weeks, officials said, after a meeting chaired by Prime Minister Narendra Modi where he tasked them to put together a working plan to communicate better with small businesses.

“We have taken up with GSTN and we will sign an understanding with them on how the data can be used, specifically to reach out to lakhs of small and micro businesses … We have had several rounds of discussions,’ MSME secretary Arun Kumar Panda told ET.

“The Centre wants much more credit flow into the micro and small enterprises, while looking to ensure more entrepreneurs, looking at starting ventures of their own, get access to finance. In this regard, we have taken several decisions to address the challenges of credit and delayed payment, and may look to overhaul the public procurement policy,” he said.

The government wants to highlight the initiatives it has taken and ensure that the MSMEs have actually benefited from those. Just a month after demonetisation was announced, the PM, in December 2016, had said that the MSME was a priority area for the government, announcing a three-fold increase of the credit fund meant for the sector.

Officials said the focus of the outreach will be on 115 “aspirational” districts. Aspirational districts have been defined as among the most backward areas, but which have been prioritised by the Centre for the implementation of its schemes.

“States will have to decide how to go about it. But we will send our teams there and identify beneficiaries,” Panda said. The initiative is mainly aimed at engaging with the small and micro businesses, and informing them of the structural reforms taken by the government, such as the threefold increase in the credit guarantee fund to Rs 7,500 crore.

“The problem was that the fund was over-leveraged. It has now been enhanced, which has solved the problem. Banks now have a greater comfort level that even if the loans go bad the credit fund can handle it. Also, the credit fund now can disburse loans to entrepreneurs requiring up to Rs 2 crore, instead of Rs 1 crore,” an official said.

The Centre has also decided that if non-banking financial companies were willing to finance entrepreneurs, it would extend the guarantee to them as well. It has also increased the guarantee cover to 75% of the loan, apart from changing the guidelines to allow the borrower to offer partial collateral- a provision that did not exist earlier.

The Centre also has data of 41 lakh enterprises that fall under the MSME sector, but are not required to pay GST. “Once we get the data, we will look at ways to have a structured way of reaching out to them, providing assistance wherever needed. We have already spoken to multiple industry associations,” an official said.

Apart from the Opposition, RSS affiliates have been constantly pressurising the Centre to pay more attention to the sector, and endure greater access to credit at reasonable interest rates.

via export: Comm Min notifies exemption from IGST, compensation cess under advance authorisation, EPCG scheme – The Economic Times

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