Rs 350 cr allocated under interest subvention scheme for MSMEs: FM Sitharaman

Around Rs 350 crore has been allocated for FY 2019-20 for two per cent interest subvention for all Goods and Services Tax (GST) registered Micro, Small and Medium Enterprises (MSMEs), on fresh or incremental loans, Finance Minister Nirmala Sitharaman said on Friday.

"Under the interest subvention scheme, Rs 350 crore has been allocated for FY 2019-20 for 2 per cent interest subvention for all GST registered MSMEs, on fresh or incremental loans," Sitharaman said while presenting the Union Budget 2019-20, adding that "Make in India", with particular emphasis on MSMEs, is one of the major focus areas of the budget.

For ease of access to credit for MSMEs, the government has introduced a scheme for providing loans up to Rs 1 crore within 59 minutes through a dedicated online portal.

She informed that the government has decided to extend pension benefit to about three crore retail traders and small shopkeepers whose annual turnover is less than Rs 1.5 crore under a new scheme named Pradhan Mantri Karam Yogi Maandhan Scheme.

Announcing that under the Scheme of Fund for Upgradation and Regeneration of Traditional Industries' (SFURTI) 100 new clusters will be set up during 2019-20 enabling 50,000 artisans to join the economic value chain, she said, "SFURTI aims to set up Common Facility Centres (CFCs) to facilitate cluster-based development to make traditional industries more productive, profitable and capable of generating sustained employment opportunities. Focused sectors are bamboo and honey."

Speaking about the efforts taken by the government to develop rural industry, she said, "Scheme for Promotion of Innovation, Rural Industry and Entrepreneurship (ASPIRE) would be consolidated for setting up of 80 Livelihood Business Incubators (LBIs) and 20 Technology Business Incubators (TBIs)in 2019-20 to develop 75,000 skilled entrepreneurs in agro-rural industry sectors."

In order to encourage farmers, the government will support private entrepreneurship in driving value-addition to farmers' produce from the field and for those from allied activities. "Dairying through cooperatives will be encouraged by creating infrastructure for cattle feed manufacturing and milk procurement, processing and marketing," she said.

The Union Budget has also made proposals under indirect taxes to promote Make in India, that may also benefit the MSME sector such as to provide domestic industry with a level playing field and basic Customs duty is being increased on items like cashew kernels, PVC, Vinyl flooring, tiles and metal fitting.