The Union Cabinet met for the first time in its second year and took key decisions to help the MSME sector and farmers. The Cabinet has further revised the definition of MSMEs, a decision that will lead to inclusion of many industrial units under its ambit. Those enterprises with investment up to Rs 50 crore and turnover of up to Rs 250 crore will now be able to avail the benefits of the MSME sector. There was approval for provisioning of Rs 20 thousand crore as subordinate debt to provide equity support to the stressed MSMEs.
MSME Minister Nitin Gadkari said that this move will benefit two lakh stressed MSMEs. Apart from that he also spoke about funds through which there will be equity infusion of Rs 50 thousand crore. The CCEA also approved the increase in the MSP for all mandated Kharif crops. Addressing the press conference, Agriculture Minister Narendra Singh Tomar said that the Minimum Support Prices (MSP) for 14 Kharif crops will be increased by 50-83% to ensure better returns for their farm produce.
The government hiked MSP for paddy by Rs 53 per quintal, while the same for cotton has been increased by Rs 260. The increase in MSP for Kharif crops or marketing season 2020- 21 is in line with the Union Budget 2018-19 announcement of fixing the MSPs at a level of at least 1.5 times of the weighted average cost of production.
Tomar also said that the Cabinet has approved extension of repayment date for short-term loans for agriculture and allied activities till 31 August with continued benefits of 2%Interest subvention and 3% prompt repayment incentive to farmers. The Cabinet also cleared a scheme called PM SVANidhi which is a special microcredit facility to resume their livelihood which had been impacted due to Covid-19.
Under this scheme more than 50 lakh street vendors in urban/peri-urban and rural areas will benefit. Under this scheme, vendors can avail credit loan of Rs10 thousand repayable in monthly instalments. On timely/early repayment of the loan, an interest subsidy of 7% per annum will be credited to the bank account of the vendor.