In line with government’s top focus on energising micro, small and medium enterprises (MSMEs) in the country, the Cabinet Committee on Economic Affairs (CCEA) chaired by Prime Minister Narendra Modi, has approved provisioning of Rs 20,000 crore as subordinate debt to provide equity support to stressed MSMEs and proposed equity infusion of Rs 50,000 crore for units through a Fund of Funds as part of the roadmap to implement the package announced for the sector.
The CCEA has decided for further upward revision of MSME definition. It cleared enhancing the turnover limit for classifying units as medium units to Rs 250 crore from Rs 100 crore announced last month along with the package for the sector. It also decided that the turnover with respect to exports will not be counted in the limits of turnover for any category of MSME units whether micro, small or medium,
MSME Minister Nitin Gadkari has said that the approval for provisioning of Rs 20,000 crore as subordinate debt to provide equity support to the stressed MSMEs will benefit 2 lakh such MSMEs. Besides, he said equity infusion of Rs 50,000 crore for MSMEs through Fund of Funds will establish a framework to help MSMEs in capacity augmentation and also provide an opportunity to them to get listed in stock exchanges. He also said a fund of funds with corpus of Rs 10,000 crore will be set up, which will be operated through a mother fund and few daughter funds. He noted that the fund structure will help leverage Rs 50,000 crore of funds at daughter funds level. He hopes this revolving fund will multiply in value terms significantly in the coming years.
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