MSME “Ministry of Micro, Small, and Medium Enterprises” is the backbone of many developing, and developed countries. And for India, it is termed as “The Engine Of Growth”. MSME has played its role very effectively not just by creating employment but has employed more than 50 billion people across the country. MSME has so far contributed a total of 8% of the Indian GDP which is a great thing.
Due to pandemic and lack of resources, India is facing some sort of serious issues and to overcome all these things Indian government has changed many things in the MSME sector so that it can stabilize the economy as soon as possible. The main source of attraction for MSME is they don’t need a huge amount of investment or infrastructures they can work in minimum resources also, they are helping in reducing the rate of unemployment by employing millions and billions of people nationwide.
Let us have a look at the benefits of MSME registration-
● COLLATERAL FREE LOANS
With the new changes, the government has made the availability of collateral-free loans for the small, and micro business owners. And under this scheme, both new and old ones can claim for the benefits. A trust named The Credit Guarantee Trust Fund Scheme was introduced by the GOI(Government Of India), SIDBI(Small Industries Development Bank Of India) and the Ministry of Micro, Small and Medium Enterprise to make sure this scheme is implemented (Credit Guarantee Scheme) for all Micro and Small Enterprise.
Subsidies will be given to the patent ones also. 50% of the subsidy will be given to those who have registered for the certificate of MSME. And to avail it, you will have to register it by giving an application to the ministry.
● EXEMPTION IN INTEREST RATE
All the business owners or enterprises that are registered under MSME can avail for a benefit of 1% on the OverDraft as it is given in the scheme which may differ from bank to bank.
● RESERVATION POLICY
The reservation policy is the most vital one which has been given in the scheme of MSME. Due to more competition, the government has given some of the main products specifically to only these industries so that their products’ quality doesn’t fall. And under the Government Stores Purchase Program, the government has chosen more than 300 products exclusively for this sector.
For example, wooden furniture and fixtures, pickles, bangles, groundnut oil, mustard oil, bread, jute, brakes, and clutches for automobile corporations, and many more.
● CAPITAL AID
Old MSMEs may not be able to use their resources for a longer time and might have to work with only. Under the Capital Aid for technological up-gradation scheme, the government is helping those MSMEs to upgrade their business with the latest technologies and equipment by giving them low-interest loans from the banks.
● PROTECTION AGAINST DELAYED PAYMENTS
Due to different situations, there comes a situation that SSIs or MSMEs don’t have enough money to pay back their loans with interest. The Ministry of Micro, Small, and Medium Enterprise works as a helping hand in the collection of the payment which was due from the buyer’s side. And they try to settle these things in minimum time through conciliation and arbitration.
If the payment is delayed from the buyer’s side from 45 days to the date on which the buyer chooses to give the money then they will have to pay compound interest on the interest and that too every month. The interest rate is three times the rate that is notified by the Reserve Bank of India.
● CONCESSION IN THE ELECTRICITY BILLS
Some amount of concession will be given to those who have registered their business under or as MSME. For this, they will have to provide all the necessary certificates to the electricity department for the valid concession.
● REIMBURSEMENT OF THE CERTIFICATION CHARGES
Registered MSMEs can claim reimbursement on the charges or whatever the amount they have spent to get the ISO certificate.
The government will not only buy products from them which they have promised to buy but will also give time to time assistance n terms of development, marketing, manufacturing of those products which do not fall under their category or the reservation policy
The government is trying so hard to give them every possible benefit be it in terms of money, assistance, trading, etc. And the main reason behind all these things is that MSMEs are contributing a lot not only in GDP but also in the growth, development and by creating more employment. The government is providing them with some of the best professionals who need them and who can help them to grow their business more, how to work in a limited time and with the limited equipment, how to increase more employment, and many more.