Government Protecting MSMEs From Global Slowdown: Patel, Indian Government Protecting MSMEs, Indian Government Protecting Micro Small and Medium Enterprises From Slowdown

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SME Times News Bureau | 28 Apr, 2010
Keeping in view the impact of global economic slowdown on micro, small and medium enterprises (MSMEs) the Government has taken several measures to protect them, said Minister of State (Independent Charge) for MSMEs, Dinsha Patel in a written reply to a question in the Lok Sabha on Tuesday.

The minister said, "The global economic slowdown adversely affected the export market for Indian industry, including the micro, small and medium enterprises (MSMEs). In particular, sectors such as textiles, leather, gems and jewellery, auto components, etc., were mainly affected."

He informed that the Government, the Reserve Bank of India (RBI) and the Public Sector Banks have taken several measures for protecting and providing a stimulus to the MSMEs.

These steps include:

(i) extending the loan limit under Credit Guarantee Scheme from Rs.50 lakh to Rs.1 crore with a guarantee cover of 50 percent;

(ii) increasing the guarantee cover under Credit Guarantee Scheme from 80 percent to 85 percent for credit facility up to Rs.5 lakh;

(iii) an advisory to Central Public Sector Enterprises to ensure prompt payment of bills of MSMEs;

(iv) interest subvention of 2 percent in pre and post-shipment export credit to small and medium enterprises (SME) sector;

(v) refinance limit of Rs.7,000 crore to Small Industries Development Bank of India (SIDBI) for incremental on-lending to the micro and small enterprises (MSE) sector;

(vi) grant of need-based ad hoc working capital demand loans up to 20 percent of the existing fund-based limits; and

(vii) reduction in interest rates for borrowing by micro enterprises by 1 percent and in respect of SMEs by 0.5 percent.