The micro, small and medium enterprise sector contribute to 45 per cent of india total industrial employment, 50 per cent of india total export and 95 per cent of all industrial unit of the country and more than 6000 types of products are manufactured in these industries. When these industries expand, the country economy as a whole expand and flourish. Small scale industry are another name for these types of enterprise.
The finance minister issued the first big statement for micro, small and medium enterprise. On the 13th of may, 2020, measures for micro, small and medium enterprise were also announced.
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Global tenders of up to rupees 200 crores are available.
Government expands scope for global tenders for micro, small and medium enterprise in order to protect the micro, small and medium enterprise from unfair competition from foreign companies, the government has decided to take a major step towards self reliant india by disallowing government procurement tenders up to 200 crores for foreign company, this step would give a major boost to medium enterprise in India which face tough competition at the hand of foreign player.
Through a fund of fund, a total of rupees 50,000 crore will be invested in micro, small, and medium enterprise.
The government has proposed to set up funds of funds with a corpus of rupees 10,000. The corpus would provide equity funds for micro, small and medium enterprise with growth potential and viability. This step would help to expand micro, small and medium enterprise size as well as capacity and will also promote micro, small and medium sized enterprise to list on the main board of the stock exchange.
3 lakh crore collateral free automatic loans for enterprise, micro, small and medium enterprise and udyog aadhaar certificate print.
There is a relief is for those micro, small and medium enterprise which were already working before lockdown and running loans from banks non banking financial company and running them in standard category and they are facing the cash crunch due to the lock down. For those micro, small and medium enterprise, to resume their operations that is to start procuring material, payment of wage and salary, payment to vendors this facility of emergency credit line up to 20 per cent of their entire outstanding credit as on 29th of feb, 2020.
Borrowers having outstanding up to rupees 25 crore and turnover of rupees 100 crore are eligible to take benefit.
The loan would be for four years, with a 12 month grace period on principle repayment.
There is a credit guarantee of 100 per cent.
There will be 100 per cent credit guarantee to cover bank and non banking financial company on principal and interest.
This scheme can be availed till the 31st of october, 2020.
Subordinate debt of 20,000 crore for strained micro, small, and medium enterprise.
Stressed micro, small and medium enterprise need equity support.
Functioning micro, small and medium enterprise which are non performing asset and stressed will be eligible.
The government of india will support rupees 4000 crore to credit guarantee fund trust for micro and small enterprise and print udyog aadhaar certificate.
Credit guarantee fund trust for micro and small enterprise will partially support the banks.
Promoter of the micro, small and medium enterprise will be given debt by banks which will, in turn, be infused by the promoter in the equity of the unit.
Secondly what is micro, small and medium enterprise?
The existing micro, small and medium enterprise classification was based on the criteria of investment in plant and machinery and equipment. So, to enjoy the micro, small and medium enterprise benefit, the micro, small and medium enterprise have to limit their investment to a lower limit, as mentioned below.
Because they cannot scale their business any further, these lower boundaries are destroying the will to expand. Also, there has been a long pending demand for the revision of micro, small and medium enterprise classification so that they can further expand their operations while continuing to avail the micro, small and medium enterprise benefit.
Now under the aatmanirbhar bharat abhiyan the government revised the micro, small and medium enterprise classification by inserting composite criteria of both investment and annual turnover. Also, the distinction between the manufacturing and the service sector under the micro, small and medium enterprise definition has been removed. The sectors will be brought closer together as a result of this elimination. The following is the revised micro, small and medium enterprise classification, where the investment and annual turnover, both are to be considered for deciding an micro, small and medium enterprise.
Please note above revised definition is applicable from the 1st of july, 2020, government notifies revised criteria for the classification of micro, small and medium enterprise.
Firstly to do the registration the small and medium scale industry owner has to fill a single form which he can do online as well as offline.
Secondly if a person wants to do registration for more than one industry then also he can do individual registration.
Thirdly, the registration document can be found below.
Aadhar card of authorized person that is proprietor, any partner, and director.
The social category of authorized person.
Name of enterprise, type of enterprise.
Permanent account number of the enterprise.
The registered address of the business.
Location of plants.
Date of commencement.
No of person employed.
Investment in plant and machinery and equipment and turnover details.
National industry classification code.
Fourthly benefits for trading and small scale manufacturer and service industry.
Loans without collaterals.
The government has introduced various initiatives for micro, small and medium enterprise, small scale industry that allow them to avail credit without collateral. One of the best micro, small and medium enterprise registration benefit, the initiative to provide collateral free loan is undertaken by government of india, small industries development bank of india and the ministry of micro, small and medium enterprise under the name the credit guarantee trust fund scheme. For small business owner, this is by far the best micro, small, and medium enterprise registration benefit.
Subsidy on patent registration and industrial promotion.
Business enterprise registered under the micro, small and medium enterprise development act are given a hefty subsidy of 50 per cent for patent registration.This is obtained by submitting an application to the appropriate ministry. In addition to this, one of the great micro, small and medium enterprise registration benefit is to get subsidy for industrial promotion suggested by the government.
Overdraft facility with zero per cent interest.
Business and enterprise registered as micro, small and medium enterprise, small scale industry under the micro, small and medium enterprise act are eligible to avail a benefit of 1 per cent on the overdraft as part of the credit guarantee trust fund scheme. Although this can vary from bank to bank.
Concession on electricity.
One of the simplest micro, small and medium enterprise registration benefit, business registered under the micro, small and medium enterprise act can avail a concession on electricity bills. All they have to do is submit the bills along with an application and a copy of the registered certificate by micro, small and medium enterprise.
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Protection against delayed payment.
Understanding the ambiguity lying with business revenue, the government has extended a helping hand by providing a layer of protection against payment. As of now the ministry of micro, small and medium enterprise has given business owner and enterprise to collect interest on payment delayed by the buyer.
Under the micro, small and medium enterprise registration benefit, a buyer is expected to make a payment for the goods and services within 15 days of the purchase. If the buyer delays the payment for more than 45 days the enterprise is eligible to charge compound interest which is 3 times the rate notified by reserve bank of india.
International standard organization certification charges reimbursement.
A registered small and medium enterprise can claim the expense for reimbursement that were spent on international standard organization certification.
The micro, small and medium enterprise industry is growing significantly due to the constant support from the indian government. This has further inspired everyone especially the youth to explore their entrepreneurial side and start their own venture. However, in such cases, knowledge regarding micro, small and medium enterprise and micro, small and medium enterprise registration benefit are a must to know.