NEW DELHI: The government has set up an inter-ministerial group to firm up the contours of the credit guarantee scheme for micro, small and medium enterprises (MSMEs) announced in the budget, officials said. The MSME ministry will move the scheme for the expenditure finance committee’s approval after consultations with stakeholders, a senior government official told ET.
“The consultations are happening at a good pace and in the next four weeks, the scheme draft should be prepared,” said the official, adding that post-consultation, the draft will be sent for expenditure finance committee’s approval in the next two months.
Officials from the department of financial services, department of commerce, ministry of food processing and department of economic affairs are part of the inter-ministerial group, the official said.
“The idea is to take inputs from the stakeholders and ensure that any concerns or issues they have with regard to the scheme are addressed before the roll out,” the official said.
Finance minister Nirmala Sitharaman had announced an MSME package in the budget that included a credit guarantee scheme to cover loans of up to Rs 100 crore by MSMEs for purchasing machinery and a guarantee fund for ‘stressed MSMEs’ or MSMEs in the ‘special mention account’ to prevent them from becoming non-performing assets (NPAs).
The budget also provided for setting up of ecommerce export hubs and expansion of Small Industries Development Bank of India (Sidbi) branches to serve all major MSME clusters within three years, with 24 branches to be established this year. The scheme was announced to avoid snuffing out MSMEs at a stage where they can be revived.
“We have begun consultations with state governments… MSME industry associations have been asked to share their views on the scheme structure, including modalities through which the scheme can be implemented,” he said. The official said consultations with states can help better understand requirements at a granular level.
