Union Cabinet Approves MSP For 14 Crops, Rs 50,000 Cr Investment For MSMEs

NEW DELHI: Prime Minister Narendra Modi on Monday said that the decisions taken by the Union Cabinet today will bring about positive changes in the lives of farmers, labourers and workers and create "huge employment opprtunities".

Farmers will get 50-83 per cent more returns as the Union cabinet approved minimum support price (MSP) for 14 crops. The cabinet also cleared a Rs 20,000-crore debt scheme, which would help nearly two lakh micro, small and medium enterprises (MSMEs) raise funds amid the stress of the lockdown, a leading channel reported.

To encourage private sector investment, the Cabinet also approved funds worth Rs 50,000 crore for MSMEs.

"To give impetus to the campaign for a self-reliant India, we have not only changed the definition of MSMEs, but have also approved several proposals to revive it. This will benefit the small and medium scale industries, as well as create huge employment opportunities," Modi said in a series of tweets in Hindi and English.

India will prosper, the prime minister said, when its farmers prosper.

"Our government has fulfilled its promise to our hardworking farmers of fixing the MSP at a level of at least 1.5 times of the cost of production," he said. Care has also been taken towards improving the financial situation of our farmers," the prime minister noted.

PM Street Vendor's Atma Nirbhar Nidhi (PM SVANidhi) is a very special scheme, he said.

"For the first time, our street vendors are a part of a livelihood programme. This scheme will ensure support for street vendors. It harnesses technology and emphasises on capacity building," he said.

As this Government enters its second year, the Cabinet took important decisions that will have a transformative impact on the MSME sector, our hardworking farmers and street vendors. Today’s decisions will ensure a better quality of life for them. https://t.co/5QtQL2djtT

— Narendra Modi (@narendramodi) June 1, 2020

This meet was the first meeting of the Union Cabinet after the Modi 2.0 government entered its second year in office. The meet was preceded by meetings of the Cabinet Committee on Security and the Cabinet Committee on Economic Affairs.

Highlights:

• Proposal for provisioning of Rs 20,000 crore, to benefit 2 lakh stressed MSMEs.
• Proposal for equity infusion of Rs 50,000 crores for MSMEs through fund of funds.
• Definition of micro manufacturing and services unit was increased to Rs.1 crore of investment and Rs. 5 crore of turnover.
• The limit of small unit was increased to Rs.10 crore of investment and Rs 50 crore of turnover.
• Limit of a medium unit was increased to Rs 20 crore of investment and Rs. 100 crore of turnover. This revision is done after 14 years since the MSME Development Act came into existence in 2006.

For Street Vendors

• The Ministry of Housing and Urban Affairs has launched a Special Micro-Credit Facility Scheme - PM SVANidhi - PM Street Vendor's AtmaNirbharNidhi, for providing affordable loans to street vendors. Nearly 50 lakh to benefit.
• This is for the first time in India’s history that street vendors from periphery- urban/ rural areas have become beneficiaries of an urban livelihood programme.
• The vendors can avail a working capital loan of up to Rs. 10,000, which is repayable in monthly instalments in the tenure of one year. On timely/ early repayment of the loan, an interest subsidy @ 7% per annum will be credited to the bank accounts of beneficiaries through Direct Benefit Transfer on six monthly basis. There will be no penalty on early repayment of loan.

For Farmers:

• For the Kharif season 2020-21, the government fixed the MSP at a level of at least 1.5 times of the cost of production.
• MSP of 14 crops for the Kharif season 2020-21 has been announced, return over cost of crops ranges from 50% to 83%.
• Repayment date up to 31.08.2020 extended for all Short-Term loans up to Rs.3 lakh advanced for agriculture and allied activities by banks. Farmers will also get benefit of interest subvention and prompt repayment incentive.
• The agricultural short-term loan due between 1st March 2020 and 31stAugust 2020 will continue to get benefit of 2% Interest Subvention (IS) to Banks and 3% Prompt Repayment Incentive (PRI) to farmers.