Important initiatives taken by Government for MSMEs under Atmanirbhar Bharat Abhiyan are as under:

Credit guarantee of Rs 3 lakh crore:

Intended to help MSMEs that have a 25 crore outstanding loan or less than 100 crore turnover.

This provision will rescue MSMEs that need additional funding to meet operational liabilities and restart operations.

The loans should be taken before October 31, 2020, will have a four-year tenure and moratorium of 12 months.

There is a 100% credit guarantee cover on principal and interest.

The credit guarantee scheme is expected to help MSMEs survive the economic slowdown.

Credit guarantees help banks meet the credit demand of MSMEs and provide an assurance that loans will be repaid by the government.

Subordinate debt for NPA/stressed MSMEs:

The government has set aside 20,000 crore as subordinate debt to help about two lakh MSMEs with stressed accounts or non-performing assets (NPA).

Under this scheme, promoters of the MSME will be given debt, which will then be infused as equity in the unit. However, unlike credit guarantees, government support in this scheme is partial.

Fund of Funds:

The government has created a fund with a corpus of Rs. 50,000 crore for MSMEs with growth potential and viability.

The objective of this fund is to infuse equity to help MSMEs expand and grow. While the government is likely to contribute Rs. 10,000 crore, while other institutions like SBI and LIC are likely to fund the remaining amount.

This fund, which will operate through a mother fund and a few daughter funds, will also help MSMEs get listed on the main board of stock exchanges.

Revised definition:

The MSME definition has been changed to enable more businesses to benefit from incentives offered in the Atmanirbhar Bharat Abhiyan.

It takes investment and annual turnover into consideration and does not differentiate between manufacturing and services.

The ‘turnover’ based definition is seen as a better means of identifying MSMEs, particularly in services such as mid-sized hospitals and diagnostic centres.

These will now be able to qualify for benefits offered to MSMEs.

Clearing of dues:

Centre would be clearing pending MSME dues in 45 days.

As on March 31, 2020, the total outstanding payments to MSME units were estimated over 4.95 lakh crore.

The Central Government ministries and departments, state governments and public sector units owe MSMEs more than half of this amount.

The MSME Samadhaan website, listed payment claims of 40,720 crore as on May 14, 2020.