Micro, small and medium enterprises (MSME) is often touted as one of the support systems for developing and boosting the economy of a state and a country. India is no different in recognising the power of MSME in enhancing the country’s economy. To help the MSME sector Government of India has come up with quite a few benefits and support for those registering under MSME.
Also read: MSMEs – The Pillar Of Indian Economy
Why the Government is helping the MSME sector?
The study also reported that with the government’s help there has been a significant rise among the borrowers that is about 4 lakhs between July and December 2017. Furthermore, compared to large corporates’ rate of NPA that has risen from 7.9 per cent to 16.9 per cent, the overall NPA rate for MSME sector has risen from 8 per cent to 11 per cent between 2015 and 2017.
Just based on these factors one can understand the MSME has been quite a profitable sector for the government of India and hence the centre has decided to give it a boost.
Also read: Role Of MSME In The Growth Of Economy
How Government is lending support to MSME?
In September 2018 the Government of India launched the contactless banking for MSMEs to bolster their growth. This banking process will enable the entrepreneurs to receive a loan of Rs.1 crore within an hour. A web portal has been launched along with other loans and schemes available for MSMEs. This banking system for MSMEs considered being a game changer in the next 6 to 7 months that will be immensely beneficial for the MSME entrepreneurs.
Indian government and Morocco have also signed an agreement to strengthen their MSME cooperation. With India having strong MSME sector in manufacturing while Morocco has a small MSME manufacturing sector, the African country intends to invest in Indian manufacturing companies. This will immensely benefit Indian MSMEs, as well as India, will continue to export cotton yarn, synthetic fibre, pharmaceuticals, and transport and agricultural implants along with chemical, spices and manufacturing metals.
Along with these the MAMED Act allows the MSME entrepreneurs to receive benefits like easy loan sanctions with low-interest rates. The owners of the micro, small or medium size enterprise registered under MSME also receive exemption excise, an exemption under Direct Tax Laws and also other legal supports such as reservation and interest on Delayed Payments Acts. Each State Government of India provides their own incentives, facilities, and packages to the MSMEs.
But before anyone considers registering under MSME, s/he needs to read and understand the definition that Government of India uses to determine and define MSME. Only if the applicant fulfils the definition and other requirements s/he will get the registration certificate of MSME.