Union Minister Nitin Gadkari on Monday approved changes in the Interest Subvention Scheme guidelines for micro, small and medium enterprises, and said the modifications are expected to boost their productivity through access to credit at reduced cost.
The Minister for Road Transport & Highways and MSME reviewed the functioning of the scheme.
"It is expected that the modifications in the scheme guidelines will lead to fulfilment of objectives of the scheme, i.e. to increase productivity in MSMEs through access to credit at reduced cost," Gadkari said.
The minister highlighted that the government is committed to enhancing credit to the MSME sector and the implementation of the scheme is being closely monitored to help micro, small and medium enterprises (MSMEs) get incremental credit of up to Rs 1 crore with an interest subvention of 2 per cent.
The modifications to the scheme include settlement of claims based on internal or concurrent auditor certificate and submission of statutory auditor's certificate once by June 30, 2020; and acceptance of claims in multiple lots for a given half year by eligible institutions.
"The improvements are set to provide momentum giving fillip to the MSME sector," an official statement said.
The Interest Subvention Scheme for MSMEs was launched by Prime Minister Narendra Modi in November 2018.
Besides, in the modified scheme, requirement of Udyog Aadhaar Number (UAN) has been dispensed with for units eligible for GST and the last date of submission of claims for the half-yearly period ended March 31, 2019, has now been extended till December 31, 2019.
Under the changes approved, trading activities without UAN have also been made eligible.
"The modifications in operational guidelines carried out are based on suggestions made by various stakeholders, including banks and lending institutions who had brought to light operational difficulties which were hindering a smooth roll-out of the scheme," the statement said.