MSME ministry launched updated Credit linked Capital Subsidy Scheme (CLCSS)

In the 2-day event (September 5& 6, 2019) of national workshop on ‘Credit Linked Capital Subsidy and Delayed Payment of MSMEs’ held at New Delhi, the Union Minister for Micro, Small and Medium Enterprises Shri Nitin Gadkari has launched the updated Credit linked Capital Subsidy Scheme (CLCSS) to enable micro, small and medium enterprises (MSMEs) access to capital.MSME ministry launched updated Credit linked Capital Subsidy Scheme

Key points:
i. U.K. Sinha committee:

Gadkari stated that the government will take a decision on the recommendations of the U.K. Sinha committee which had been set up by the Reserve Bank of India (RBI) on the strength of micro, small and medium enterprises (MSME) sector. The Finance Secretary and MSME Secretary will give a final report on the recommendations of the committee after consultation with the parties concerned & it will be implemented in 15 days after that.
Recommendation:

  • The committee suggested to create a Rs 5,000 crore distressed asset fund for domestic MSMEs hurt by demonetization, the GST(Goods and Service Tax) and an existing liquidity crunch.
  • The committee also suggested the government to make PAN (Permanent Account Number) numbers a ‘Unique Enterprise Identifiers’ for procurement, availing government-sponsored benefits, and other purposes.

ii. About  CLCSS scheme:

  • It offers an upfront subsidy of 15 % on institutional credit up to Rs 1 crore for MSMEs sectors in the specified 51 sub-sectors.In the new updated scheme, there is an additional 10 % subsidy for Scheduled Castes (SCs) and Scheduled Tribes(ST) entrepreneurs while special provisions have been offered for 117 ‘aspirational’ districts, hill states and the northeastern region in India.
  • Benefits: The scheme would be crucial in raising MSME contribution to gross domestic product (GDP).The current stake in the scheme is to be increased from 29 % to 50 %. Also, exports from the region will have to be increased from the current 40 percent to 50 percent.
  • Background: The Cabinet Committee on Economic Affairs, Government of India(GoI)has approved an outlay of Rs 2,900 crore for the scheme In February 2019.

Delayed payments:
Gadkari stated that committee was being formed under the MSME secretary to oversee the issue of delayed payments. The central government takes effective steps to improve the TReDS (Trade Receivables Discounting System) platform and the online bill discounting platform, which helps sectors of MSMEs to raise funds by selling their trade receivables to corporate.

  • The ministry has already notified that all companies registered with Companies Act, 2013 with a turnover of more than Rs.500 crore as well as all Central Public Sector Enterprises (CPSEs) to get themselves on the TReDS. But as per the government data, only 27 CPSEs and about 750 corporates have registered under the platform.
  • The Centre provided a 30-day window period for all pending goods and services tax (GST) dues owed to MSMEs.
    Gadkari asked all the stakeholders to use MSME Samadhan Portal to collect data about wilful defaulters, register themselves on stock exchanges &the ministry assured them that the ministry will launch a marketing portal ‘Bharat Craft’ for the marketing of their products.

About MSME ministry:

  • Founded: 2007
  • Headquarters: Udyog Bhawan, New Delhi
  • Secretary: Dr. Dinesh Rai
AffairsCloud Recommends IBPSGuide Mock Test