Govt amends interest subvention scheme for MSMEs to give fillip to the sector
The Minister for Micro, Small and Medium Enterprises (MSMEs) and Road Transport & Highways, Nitin Gadkari has approved the changes in the Interest Subvention Scheme for MSMEs, in a meeting held to review the functioning of the scheme.
The Minister for Micro, Small and Medium Enterprises (MSMEs) and Road Transport & Highways, Nitin Gadkari has approved the changes in the Interest Subvention Scheme for MSMEs, in a meeting held to review the functioning of the scheme. The improvements are set to provide momentum giving fillip to the MSME sector. The Interest Subvention Scheme for MSMEs, launched by the Prime Minister Narendra Modi in November 2018, offers 2 per cent interest subvention for all GST-registered MSMEs on fresh or incremental loans.
To avail the benefits of the scheme, Udyog Aadhar Number (UAN) and GST number (GSTN) were both mandatory. Now, with the new changes announced, the government has done away with the requirement of UAN for units eligible for GST. Units that are not required to obtain GST may either submit Income Tax Permanent Account Number (PAN) or their loan account must be categorised as a MSME by the concerned eligible institutions.
The modifications in operational guidelines were carried out based on suggestions made by various stakeholders, including banks and lending institutions who had brought to light operational difficulties which were hindering a smooth rollout of the scheme.
Other modifications are as follows:
Settlement of claims based on internal/concurrent auditor certificate and submission of statutory auditor’s certificate once by June 30, 2020;
Acceptance of claims in multiple lots for a given half year by eligible institutions;
The last date of submission of claims for half-yearly period ended March, 31, 2019 has now been extended till December 31, 2019.
Trading activities without UAN have been made eligible.
50% of the estimated claim amounts may be released to eligible institutions (at least to those belonging to Public Sector Banks), based on data / information to be furnished by them and the Utilisation Certificate duly certified by respective statutory auditor to submitted by June 2020.
Speaking about the decision Nitin Gadkari, said, “It is expected that the modifications in the scheme guidelines will lead to fulfillment of objectives of the scheme, i.e. to increase productivity in MSMEs through access to credit at reduced cost”. He also added that the Government is committed to enhancing credit to MSME sector and the implementation of the scheme is being closely monitored to help MSMEs get incremental credit of upto Rs one crore with Interest Subvention of 2 per cent by Government.