Business Standard

Andhra CM releases 1st tranche of Rs 450 cr to clear pending industrial incentives of MSMEs


Press Trust of India Amaravati
As part of the Rs 1,110-crore 'ReStart Package' to help reopen lockdown-hit MSMEs, Andhra Pradesh Chief Minister Y S Jagan Mohan Reddy on Friday released the first tranche of Rs 450 crore for clearing the pending industrial incentives that would benefit nearly 98,000 units.
In a statement, the state government said that the chief minister released the amount despite the "deep financial crisis". It was done during a video conference with district collectors and entrepreneurs here.
Earlier in the month, Jagan had announced the state will clear 50 per cent of all pending industrial incentives of Rs 904 crore to micro, small and medium enterprises (MSMEs) in two installments to encourage them to reopen their business affected due to the lockdown, clamped to prevent the spread of COVID-19. The second tranche of Rs 454 crore will be cleared on June 29.
The chief minister stated that the previous government did not pay nearly Rs 828 crore of industrial incentives between 2014-2019.
The budget allocations in the previous regime were very low resulting in accumulation of huge incentives to be paid to MSMEs driving them towards becoming a stressed unit, the government said.
Jagan also directed district collectors to conduct a skill gap study with the industries and accordingly impart the required skills among the youth through Skill Development Colleges.
In order to give preferential market access to MSMEs in government procurement, the chief minister announced that 360 identified items will be purchased from MSMEs and all those payments will be cleared in a period of 45 days.
Of the total purchases, almost 25 per cent of the purchases are to be done from micro and small enterprises, 4 per cent from SC-ST community enterprise, and 3 per cent from women entrepreneurs, he added.
Jagan also instructed the district collectors to lay special focus on the MSME segment and assign a Joint Collector exclusively for the development of MSMEs.
He stated that over 97,428 MSMEs were established in the state which employ about 10 lakh workforce. With this supportive initiative, over 72,531 micro-enterprises, 24,252 small and 645 medium scale industries will be benefitted.
Under the 'ReStart Package', all the minimum power demand charges of MSMEs during the months of April, May and June at an estimated amount of Rs 188 crore will be waived.
Besides, Rs 200 crore is going to be provided as input capital to the firms at low-interest rates which would put the MSMEs back on rails. The state government will allocate Rs 200 crore as investment capital by providing loans in partnership with the Small industrial Development Bank of India at a low-interest rate.

Disclaimer: No Business Standard Journalist was involved in creation of this content

Don't miss the most important news and views of the day. Get them on our Telegram channel

First Published: May 22 2020 | 6:40 PM IST

Explore News