NEW DELHI: With an eye on the upcoming elections, Prime Minister Narendra on Friday reached out to the disgruntled small businesses, sensing the growing unease among them over credit flow.
The PM announced a slew of measures for the cash-starved micro, small and medium enterprises (MSMEs) sector such as fast-tracking of loan clearance up to Rs 1 crore and an interest subsidy of 2 per cent on such loans for GST-registered companies.
Calling it his Diwali gift for the sector, the PM announced a nationwide rollout of an online platform for small businesses, which will clear loans Rs 1 crore within 59 minutes.
“Think, only 59 minutes not even one hour,” the Prime Minister said while launching an outreach programme for the MSME sector here.
He topped it with a 2 per cent rebate for loans of up to Rs 1 crore for GST-registered MSMEs along with a 5 per cent interest subsidy on pre- and post-shipment credit against 3 per cent doled out earlier.
Modi also announced that inspections of factories in the sector would be sanctioned only through a computerised random allotment and inspectors would have to upload reports on the portal within 48 hours. Being the second largest employer and once a strong vote bank of the BJP, there was growing disenchantment in the MSME sector over slow disbursement of credit, issues over exports and delay in getting GST refunds.
Sensing the inchoate anger among the trading community, Congress leader Rahul Gandhi had attacked the government for “siding with big corporates and ignoring small businesses”.
In August, he said that if Congress came to power in 2019, it would shift the focus of the country’s economic policy towards supporting MSMEs.
Why the focus on MSMEs
MSMEs contribute 32 per cent of the GDP and creates over 11 crore jobs. The trading community is influential as it can swing the fortunes of major political parties in elections.