Page 28 - Banking Finance July 2020

COVER STORY

INTEREST

SUBVENTION

SCHEME TO

FORMALIZE MSMES

AND FACILITATE

GROWTH

Introduction: falls in the unorganized sector, not a tech-savvy, making it
difficult for schemes and programmes.
Micro, Small and Medium Enterprises (MSMEs) plays an
important role in Indian economy, it accounts 45% of
Despite a slew of measures such as 'Make in India', 'Skill
manufacturing output of country. In terms of employment
India', 'Digital India', 'Start-Up India' etc. taken by Govt.
generation, it accounts next to agriculture sector,
along with various incentives for the sector, may find it
contributing 8% to GDP. This sector is the backbone of India's
difficult to outreach unregistered MSMEs.
economy and is considered the 'cradle' of 'Make in India'
initiative.
Considering, 1) Access to credit, 2) Access to market, 3)
Technology upgradation, 4) Ease of doing business, and 5) A
Being majority of MSMEs are unorganized and cash-
dependent, this sector witnessed the impact of Note-ban sense of security for employees as five key aspects for
facilitating MSME sector. Govt. made twelve
(demonetization) and roll out of Goods and Service Tax
(GST). The biggest challenge is that formalization of sector, announcements to address each of these five categories.
according to an estimate, 90 per cent of the MSME sector
Twelve initiatives taken by GOI on 02nd

About the author November 2018:
Y psbloansin59minutes.com

N Mohammad Ali Y For GST registered MSMEs 2 % interest subvention on
Chief Manager (Faculty) fresh or incremental loan
Union Bank of India,
Staff College, Bangalore Y Interest subvention on export credit increased from 3%
to 5 %

28 | 2020 | JULY | BANKING FINANCE