Can the recent government schemes change the growth trajectory of MSMEs?
In a bid to discuss the initiatives and benefits for Custom Brokers and Freight Forwarders in the Micro, Small and Medium Enterprises (MSME) and how to get benefits from the government schemes, Federation of Freight Forwarders’ Associations in India (FFFAI) organised an enriching webinar session on Thursday that witnessed participation across the sector and was addressed by special Guest Speaker Mr Anand Sherkhane, IES, Additional Development Commissioner, MSME, New Delhi.
Mr Sherkhane started off by talking about the 3 lakh crore support provided to the MSMEs of which 20% would come automatically from the outstanding loans taken by MSMEs from any banking sector. He emphasised upon the fact it was most suitable for working capital amidst the havoc created by the pandemic.
He then touched upon the sub-ordinate debt provision for the stressed MSMEs through infusing equity in the companies facing NPAs or problems of liquidity.
Mr Sherkhane also gave a recent update on how both of these schemes have been implemented and the Ministry of Finance and also the banking sector have issued the respective notifications for the same.
He further informed that 1,30,000 proposals have been sanctioned of which 89,000 crores have been disbursed. This was the update on the collateral loans game loan scheme.
He also touched upon the provision of infusing equity capital into the MSME with the “Fund of fund” schemes. The Centre had announced that 10,000 crore corpus would be given to any institution or body who would act as a “Mother fund” for Fund of Funds- This move, he believes will be one of the financial instruments that will take care of the capital needs of the MSME.
Govt mulling to bring private companies under 45-day payment term to MSMEs
Other initiatives that he spoke on were about handling the problem of delayed payments. To counter the problem of delayed payments, companies availing of services or delivery will now have to make the payment within 45 days of service and he also informed that they have been trying to cover private companies as well under the scheme. As of now, they are not under purview.
“The Government of India is trying to see whether there is a provision to bring the Private companies under the purview and thereafter take a decision through notification stating that private companies should make it mandatory to submit information with respect to the outstanding payments that they are supposed to be making to MSMEs, how much they paid, what is the litigation amount (in case of disputes) and how much is the balance left- this is going to be done in the coming days.”~Anand Sherkhane, IES, Additional Development Commissioner, MSME, New Delhi.
He also addressed other notable initiatives like provision of three tenders to the extent of 200 crore that would only be reserved for MSMEs and the Labour ministry issuing orders with respect to Employer Contribution Act regarding payment of loan installments being deferred and moratoriums extended by almost six months.
The panelists also put forth their views and opinions on how Customs and Freight Forwarders should be placed under a separate category, to which Mr Sherkhane suggested that the members submit a proposal and he would get back to it in a week’s time on it.
There was also a recurrent thought being echoed about medium enterprises not being provided the same protections as micro and small enterprises, which he agreed but due to the recent change in the definition of MSME, he was hopeful that things will change.
“Since the Public Procurement Policy is still for the MSEs, the inclusion of Medium[enterprises] might not happen right away. But as for other schemes is concerned, perhaps the inclusion of Medium enterprise will happen in ways, that we will have to see,” said Mr Sherkhane
As a part of the programme, he also spoke about web portals like the ‘CHAMPIONS‘ portal which is a tech-driven control room-cum-management information system and the Public Procurement Policy Monitoring portal called “SAMBANDH” portal and also briefed the august gathering on how registrations through the UDYAM portal were simple and took not more than 15 minutes.
Plans in the offing:
“For the future, we are planning and working on a World Bank project wherein we intend to start Enterprise Development Centre or Enterprise Facilitation Centres (the names may vary later) across the country- every district will have an EDC. That would do the entire dissemination of knowledge and information with respect to the Government of India schemes, all Ministries encompassed, and also the state government schemes”, Mr Sharekhane shared.
He adds how the centres will provide necessary information that can benefit people, and even for the ones who sought to start off a new industry. The Centre will provide detailed information about where the raw material will be available, detailing the process, where one should supply- “that kind of handholding and mentoring will come from the EDC institutions”, he believed.
He also asserted that in the coming months, they will make at least hundred such EDCs functional across the country but they would be initially based in the districts.
The webinar witnessed industry veterans coming together for an enriching session. Mr Shankar Shinde, P.S Atree, A V Vijaykumar, Dushyant Mulani, S Ramakrishnan, Sudhir Agarwal, Alan Jose, Anand Sherkhane, Vinod Sharma, Sudip Dey were the key panelists who shared the screen.
As the second largest employment generating sector after agriculture, the Medium,Small and Medium Enterprise (MSME) sector provides employment to around 120 million people in India and also contributes around 6.11% of the manufacturing GDP and 24.63% of the GDP from service activities.