COVID-19 has affected over 150 countries impacting businesses by leading to a demand shock, drying up liquidity, and accentuating the inefficiencies in the supply chain, resulting in disrupted international trade. It has severely hit the Indian MSME (Micro Small Medium Enterprises) sector by decreasing collective production by more than 90 percent. MSMEs constitute around 64 million enterprises and have nearly 120 million employment, along with contributing 30 percent to Indian GDP as well as 45 percent export. Among these 14 percent are women-led enterprises and near about 60 percent are rural-based.
Following the grave situation, the Government of India announced a list of relief packages under the scheme of ‘Atmanirbhar Bharat’ or self-reliant India, to get these businesses back on track. A letter circulated by the Government of Maharashtra Directorate of Industries has urged the MSMEs to apply for ‘Atmnanirbhar’ packages to avail hand-holding support from concerned District Industries Centre. The process has been expedited, where applications will be reviewed in 7 working days with the assured security and enhanced support to resolve queries within 2 working days.
The Self-reliant India Movement is based on infrastructure, economy, vibrant demography, and demand. The package promises of Rs 20 lakh crores equivalent to 10 percent of India’s GDP, aiming to cater to various sections including cottage industry, MSMEs, laborers, middle class, industries among others. Prime Minister Narendra Modi’s “vocal for local” is now followed by ‘make them global’ to transform India into a manufacturing hub by the upcoming decade.
The packages are both in the form of liquidity support loans and equity infusion support to help the MSMEs to expand in size and capacity. It is inclusive of measures like Rs 3 lakh crores Collateral free Automatic loans for MSMEs among other businesses, along with Rs 50000 crores equity infusion through MSMEs Fund of funds, EPF support of Rs 2500 crores to business and workers for 3 months, etc. Additionally, the package oaths to newly define the MSME sector by revising the definition, Investment limits, additional criteria of turnover, and amending related laws.