Prime Minister Narendra Modi Friday announced sanction of loans of up to Rs 1 crore in 59 minutes, relaxation in labour laws, easier compliance with environmental rules and changes in company laws for small and medium enterprises as a 'Diwali gift' to give a boost to the sector, the country's second-biggest employer.
Announcing a slew of measures for the sector, he said GST-registered micro, small and medium enterprises (MSMEs) will be sanctioned a loan in just 59 minutes through a new portal www.psbloanin59min.com.
Also, GST-registered MSMEs will get a 2 per cent subvention or subsidy on a new loan or incremental loan of up to Rs 1 crore, Modi said, adding interest subvention on pre- and post-shipment credit for exports by MSMEs has been increased to 5 per cent from 3 per cent.
"Now the GST portal will ask MSME, do you need a loan? Now the government is coming forward to provide loans to MSMEs. Now no one has to run from one bank to other for loans. In new India, no one should be compelled to visit a bank branch repeatedly," he said.
Besides, he said, "honest taxpayers will get the benefit. Registering with GST and filing of tax will become your strength. This will get you 2 per cent interest subsidy," he said.
To rid the sector of inspector raj, Modi announced that inspections of factories in the sector will be sanctioned only through a computerised random allotment and inspectors will have to upload reports on portal within 48 hours. "No inspector can now go anywhere. He will be asked why he went to a factory. This is an important decision to end inspector raj," he said.
Easing compliance with environmental rules, MSMEs will need single air and water clearance and just one consent to establish a factory.
MSMEs will have to file just one annual return on eight labour laws and 10 central rules, he said, adding that an ordinance has been promulgated to simplify levy of penalties for minor offences under the Companies Act.
Modi termed the 12 new measures as "historic" that will make Diwali brighter for the sector and its millions of entrepreneurs and employees.
Observing that MSME play an important role in the economy, he said, "These are not just Diwali gift to them but this will herald a new era for them which provide the highest employment after agriculture."
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