How has MSME Ministry prioritized sector growth under Aatmanirbhar Bharat Abhiyaan?

The COVID-19 pandemic significantly impacts the economy, and the Prime Minister acknowledges the significance of Micro, Small, and Medium Enterprises (MSMEs) for the country's growth. The Aatma Nirbhar Bharat Abhiyaan has announced several measures to address the situation, with the MSME sector being a prominent part of the package. The sector has been given substantial allocation and priority in implementing measures to revive the economy. Various announcements have been made under the package to provide immediate relief to MSMEs.

MSME registration makes your business eligible for various financial assistance schemes offered by the government and financial institutions. MSMEs are working on all aspects to energize the sector in the country. In addition to existing credit-related schemes and other announcements, two announcements were made under the Aatma Nirbhar Bharat Package to enhance the accessibility of finance for MSMEs.

Recently, the Indian government launched two schemes to help small and medium-sized businesses.

The first scheme, the Credit Guarantee Scheme for Subordinate Debt (CGSSD), provides funds to MSMEs facing financial difficulties due to their accounts being stressed but still operational. The government has created a fund of Rs 4,000 crore to give loan guarantees to eligible unit promoters, targeting loans up to Rs 20,000 crore that will remain valid until 31st March 2023.

The second scheme, the Self-Reliant India Fund (SRI Fund), aims to provide equity infusion to MSMEs. In a recent announcement, the government introduced a Rs 10,000 crore fund under the Aatma Nirbhar Bharat Package to support Venture Capital (VC)/Private Equity (PE) firms investing in the MSME sector. The aim is to help MSMEs access equity funding, encourage corporatization to overcome barriers, and enable them to grow to their full potential and become global leaders.

To implement the SRI Fund, the National Small Industry Corporation (NSIC) Venture Capital Fund Limited (NVCFL) was registered as an Alternative Investment Fund (AIF) Category-II on 1st September 2021. On 12th October 2021, the Contribution Agreement was signed between the Ministry of MSME, Indian Government, National Small Industries Corporation Limited, NSIC Venture Capital Fund Limited, and SBI-CAP Ventures Limited. The daughter funds and funds committed by the SRI Fund would be mobilized in the ratio of 4:1. The initiatives of the SRI Fund are expected to create a multiplier effect, providing significant liquidity of nearly Rs 50,000 crore to the MSME sector and enabling the economic growth of the country.