With Budget 2022 Just A Week Away: SME Forum Proposes Infra Fund For MSMEs
Mobilenews24x7 Bureau
New Delhi, Jan 24 : With Budget 2022 just a week away, India SME Forum has proposed to set up an infrastructure fund to support building of industrial facilities such as Plug n Play centres, co-working spaces, incubators and raw material depots for the MSME sector. It has suggested that the MSME parks or flatted factories should be planned in close proximity to national highways for efficient transportation and supply of goods.
“With a thrust on setting up MSME clusters in rural and semi urban areas, the initiative can provide funding to all PPP projects with the States providing land and development incentives while the Industrial Development Corporations can enter into PPP agreements with estate developers, associations, organisations on a build and operate basis,” the industry body has said in its pre-budget recommendations. India SME Forum has advocated for cheaper bank finance for the MSME sector given the liquidity issues they face. It has called for interest subvention for the sector on the lines of PM Awas Yojana.
“To provide ease of access to finance for MSMEs, the government for the budget 2022 should consider increasing collateral free loans under CGTMSE (Credit Guarantee Fund Trust for Micro and Small Enterprises) from the existing Rs 2 crore to up to Rs 5 crore, which is necessitated due to the change in definition of MSMEs, with micro enterprises itself now classified as those with turnover of up to Rs 5 crore,” it has demanded. The government has widened the definition of MSME sector to cover more firms under its ambit. Firms covered under the MSME category are eligible for benefits under a host of schemes and get protection against delayed payments from buyers in certain category. Among other measures to support the sector, the industry body has proposed a scheme for one-time settlements for NPAs.
“A one-time settlement scheme which can support full waiver of penal and compound interest for MSMEs adjudged NPAs from last 5 years, if there is repayment of principal outstanding in the next 24 months. Those MSMEs who want to get back on their own feet should be provided with re-financing facilities after signing settlement for supporting employment generation,” it has proposed. Noting that regulations pertaining to labour laws, intellectual property rights and dispute resolution are rigorous in India, the industry body has called for easing them to promote entrepreneurship.
