Exclusive: Govt readies new scheme for MSEs, proposes help to rebuild biz during natural disasters

By: Nirbhay Kumar
New Delhi: The Modi government will soon launch a new scheme to offer incentives to micro and small enterprises (MSEs) for adopting new technology and also provide support to overcome natural disasters like floods and earthquakes.

The new scheme which is being prepared by the Ministry of Micro, Small & Medium Enterprises (MSME) has also proposed support for green and eco-friendly technology.

“The Scheme may provide incentives to the MSE entrepreneurs to adopt cutting-edge technology, but may not have a subsidy element. There is a need to support MSMEs for installing green/eco-friendly technology and also to overcome natural disasters like flood, earthquake etc,” the MSME Ministry stated recently while seeking inputs from industry for the new scheme.

The new scheme for technology adoption and up-gradation for MSEs is in line with the erstwhile Credit Linked Capital Subsidy (CLCS) scheme which was discontinued from April 1, 2020.

In order to upgrade technology, the scheme provided 15 per cent upfront capital subsidy to MSEs, including tiny, khadi, village and coir industrial units on loans availed by them for induction of well established and improved technologies in specified sub-sectors/products.

The MSME Ministry has received suggestions from the industry for the new scheme in the works. They include immediate Covid support- like package in case a natural disaster hits a part of the country and leads to widespread disruption in the business. Providing government-guaranteed emergency credit and amnesty against regulatory compliances are other key suggestions by the industry.

The government has taken a slew of measures in the last two years since the Covid outbreak to support the MSME sector. While launching a new scheme for the sector, Prime Minister Narendra Modi recently said that the efforts of MSME will be a key driver of Aatmanirbhar Bharat.

“I assure the MSME sector that the government is committed to making policies that meet your needs and walk pro-actively with you,” he had told small MSME entrepreneurs.