Care in Crisis: Precautionary steps to be taken by small business owners against COVID-19

During these unprecedented adverse times, the focus of SMEs should remain on staying safe, supporting their customers to keep the wheels of earning turning.

The novel Coronavirus has forced the entire world to adapt to change quickly. After a considerable lockdown period, workplaces in India are taking a large number of precautions for their employees in the unlock phase.

COVID-19 pandemic has put the spotlight on the renewed need for hygiene and overall facility management to deal with new set of challenges.

While large businesses have the infrastructure and funds to put safety facilities in place, it is the small businesses that face the existential threat and cannot remain closed for long. They are often financially fragile, with little cash or resources.

For small businesses to resume operations, and once again serve as an engine to economic growth, they need to take some precautionary measures for the safety of their staff.

  1. Sanitization and regular cleaning of offices, factories, restaurants, shops, or business facilities is important. For this, following cleaning and disinfecting measures can be followed:
  • Wear disposable gloves to clean and disinfect.
  • Clean surfaces using soap and water, then use disinfectant.
  • Practice routine cleaning of frequently touched surfaces.
  • Surfaces and objects in public places that are touched frequently, such as shopping carts and sale counter keypads should be cleaned and disinfected before each use. Apart from this, high touch surfaces at workplaces include railings, tables, doorknobs, light switches, countertops, handles, desks, phones, keyboards, toilets, faucets, sinks, etc.
  • While disinfecting hard surfaces, keep solution on the surface for at least 1 minute.
  • Electronic equipment at the workplace, such as tablets, keyboards, remote controls, and ATM machines should be wrapped with a wipeable covering.
  1. Make sure that you staff washes their hands at regular intervals, wears gloves and masks, especially if they are facing customers.
  1. Seating arrangement at your facility should be such that two employees have at least 6 feet distance. For shops and stores, ensure that your staff is available for assistance, and customers touching the products is minimal.
  1. Ascertain that the clothes or uniform worn by your staff is washed and sanitized every day, and their temperature using infrared thermometer is checked before they enter the facility.
  1. If your staff is delivering goods to households, practice a no-contact delivery, wherein the delivery executive should be advised to keep the goods at a distance for the receiver to pick them up.

However, disinfecting the more-exposed surfaces is just not enough. Exercising easy communication to educate workers about identifying the symptoms of COVID-19 is equally important. Explain the importance of washing hands, wearing masks and gloves, and cooperating with ASHA workers who visit the house or store to conduct tests for coronavirus symptoms. Also, instructions on what to do if they develop symptoms within 14 days after their last possible exposure to the virus must be provided.

On Premise precautions

It cannot be denied that one of the prime sources of exposure to COVID-19 for small business owners could be their buyers, sellers, or supply chain staff. It needs to be understood that it is not just one person but the whole ecosystem at the back end around the individual, which consists of their family who have to be safeguarded.

To do this, business owners can take the below mentioned steps:

  • Monitor delivery and supply chain staff: Temperature check or thermal-scanning before entering the facility should be made mandatory for staff and customers.
  • Protective gear: Masks and hand gloves must be worn by the staff that is into customer facing roles. Customers must also be asked to wear masks covering their nose and mouth. Also, shoe covers should be provided to the customers while entering the malls, marts or supermarket.
  • Sanitization booth: A supermarket or a mall that allows customers to help themselves should install sanitization booth with foot pumps for people to pass from or place contactless sanitizer dispensers in order to minimize the spread of virus. Also, a PPE clad security person can be appointed to ensure that people are adhering to the guidelines, post which, used PPEs should be responsibly disposed.
  • Social distancing: Healthy distance of at least 4 to 6 feet should be maintained from the customer by creating a sealed area right in front of your counter/sales staff facing spaces.
  • Make Arogya Setu App installation mandatory for people entering your premises: Aarogya Setu App is a COVID-19 tracker launched by the Government of India. It keeps the user informed if they have crossed paths with the positive COVID-19.
  • Promote online payment: Instead of using cash for receiving or making payments, modes of digital payment like mobile banking, internet banking, cards, etc. should be encouraged.

Precautions while dealing with customers

SOLV Partners With Standard Chartered Bank to Launch MSME Credit Card

The Standard Chartered powered SOLV MSME Credit Card empowers owners of micro, small & medium businesses with short-term working capital, helping them manage the impact of COVID-19 led slowdown

Bengaluru, June 26th, 2020:  On the occasion of International MSME Day, SOLV, a B2B digital platform for Micro, Small and Medium Enterprises (MSMEs), announced the launch of a credit card tailor-made for the MSME segment, in partnership with Standard Chartered Bank, India. The SOLV MSME Credit Card provides business owners with a ready means to meet ongoing business expenses including supplier payments, fuel, logistics, purchase of raw material, utility payments and others working capital outlays, in addition to also leveraging multiple benefits of the SOLV platform that helps small businesses trade goods with each other and expand their customer base across India.

Amidst the COVID-19 slow-down led cashflow issues that MSMEs are facing, SOLV MSME Credit Card is unique in its timing and host of customisation that allows for short-term revolving credit availability for small businesses and is supported by a leading multinational Bank in India.

The SOLV MSME Credit Card doesn’t charge any joining fee to the MSME, and is packed with cashback and reward features tailored for the MSME sector. With this one-of-a-kind credit card, MSMEs can also offset losses due to fuel price hikes by enjoying a 5% cashback on fuel transactions; effectively making more than two litres of petrol free for them on a fuel spend of Rs. 4000 every month.  Additionally, micro & small businesses can strengthen their digital credibility, which is fast becoming a must-have for success in the current business environment.


Commenting on this partnership, Jinesh Shah, MD & Head, Alliances, Partnerships and Mortgages, India, Standard Chartered Bank said, “The Bank firmly believes that MSMEs are the growth engine of the country and will propel India‘s next wave of development. We are committed, along with SOLV, to help the MSME sector realise its full potential. SOLV’s mission to enable MSMEs digitally and find innovative solutions for their challenges progresses further with the introduction of this affiliate credit card and we are happy to partner with them in this important initiative.”

Speaking about the SOLV MSME Credit Card, Nitin Mittal, CEO, SOLV said, “The SOLV MSME Credit Card is another step in our continuous endeavour to help MSMEs overcome their growth challenges. This credit card will help small business owners tide over immediate crises such as paying for daily expenses and logistics costs with ready access to funds from a reputed, reliable partner at an affordable rate. In the long run, it will empower them to do much more with their businesses by giving them the freedom that comes with having enough liquidity at one’s disposal.”

International MSME Day 2020: Navigating the ‘New Normal’ Together

Small businesses play an important role in the economy. Not only do they outnumber large firms considerably, but employ vast numbers of people as well. The International MSME day was initiated in order raise awareness about the importance of supporting the development of small and mid-sized businesses in developing countries.

Definition of an Indian MSME:

An independently owned and operated enterprise that is created for profit and sells products that are needed by customers in the local market is referred to as an MSME (micro, small and medium enterprise), which in Hindi translates to लघु, छोटे और मध्यम व्यापार.

On 13th May 2020, Finance Minister Nirmala Sitharaman added additional criterion of turnover along with investment to define enterprises as MSME. This definition was announced under the Atmanirbhar Bharat Abhiyaan to facilitate MSMEs to grow in size and help them deal with the difficulties brought upon by the pandemic and the ensuing lockdown.

The definition, however, got further revised on June 1, 2020 on representations that the revision is still not in tune with the market and pricing conditions and should be revised upwards. As per the revised definition, medium enterprises got redefined as businesses with up to ₹50 crore in investment and up to ₹250 crore in turnover.

This step will help attract investments and create more jobs in the MSME sector. The following table provides details of the revised limits:

CategoryOld CapitalOld TurnoverNew CapitalNew Turnover
Micro₹25 Lakh₹10 Lakh₹1 Crore₹5 Crore
Small₹5 Crore₹2 Crore₹10 Crore₹50 Crore
Medium₹10 Crore₹5 Crore₹50 Crore₹250 Crore

Why is MSME day observed?

Observed on the 27th of June every year, the International Micro, Small and Medium Enterprises (MSME) celebrates the magnanimous contribution of smaller companies in construction of the foundation and growth of the global economy.

History

In 2017, to recognize the importance of micro, small and medium enterprises in promoting innovation, creativity and employment for all, and to root for achieving the 2030 Agenda for Sustainable Development (focusing on people, planning and prosperity), the United Nations General Assembly declared 27 June as International MSME Day.

Significance of the MSME sector

Micro, Small and Medium Enterprises (MSMEs) play a major role in most economies, particularly in developing countries. They represent about 90% of businesses and generate employment for more than 50% of the world’s population. Moreover, MSMEs contribute up to 40% of the national income (GDP) in developing economies and create 7 out of 10 jobs worldwide. But what hinders MSME growth is access to finance. It cannot be denied that MSMEs largely depend on internal funds, or cash from friends and family, to launch and run their enterprises rather than opting for bank loans. The International Finance Corporation (IFC) estimates that 65 million firms, or 40% of micro, small and medium enterprises (MSMEs) in developing countries, have an unmet financing need of $5.2 trillion every year. The prominent MSME markets are East Asia And Pacific, Latin America and the Caribbean, Europe, and Central Asia.

Source: www.worldbank.org

The MSME Landscape in India:

  1. There are 42.50 million, registered & unregistered MSMEs in India, this accounts for a staggering 95% of the total industrial units in the country.
  2. MSMEs in India employ about 106 million people, that is, 40% of India’s workforce – second to the agricultural sector.
  3. Indian MSMEs produce more than 6000 products.
  4. They currently contribute around 6.11% of the manufacturing GDP and 24.63% of the service sector GDP.
  5. MSMEs produce 45% of the total Indian manufacturing output.
  6. MSME exports are approximately 40% of total Indian exports.
  7. MSMEs account for 16% of bank lending and their fixed assets total ₹1,471,912.94 crore.

Source: msme.gov.in/KPMG/CRISIL/CII

Stimulus packages for MSMEs from across different nations

The Covid-19 relief package for micro, small and medium enterprises are aimed at liquidity infusion at this juncture. Here are the top 5 countries that have announced stimulus packages for MSMEs to help them tide over the COVID-19 lockdown-induced crisis.

Japan: The 31.9 trillion yen budget will fund a 117 trillion yen ($1 trillion) economic stimulus package, that will help fight the economic impact of the novel Coronavirus pandemic. It would be the world’s largest stimulus package of $2.18 trillion for a Coronavirus-hit economy, as they have already spent nearly $1 trillion to restore the adverse effects of the pandemic. The total package would amount to 40% of the country’s Gross Domestic Product.

USA: The House of Representatives in the USA approved a $483 billion stimulus plan on top of a $2.2 trillion package, followed by a half a billion dollar stimulus. This money will back small businesses on the brink of bankruptcy, and hard-pressed hospitals. The package is necessary to ensure that small businesses have access to the resources they need.

Sweden: The central government of Sweden has guaranteed that 70% of new loans banks be provided to the companies experiencing financial difficulty due to the COVID-19 virus. This loan guarantee will primarily target small and medium-sized enterprises. Also, the Swedish National Debt Office will administer the guarantee and it is proposed that each company be allowed to loan up to SEK 75 million, although exceptions can be made.

Germany: A package worth up to 750 billion euros ($808 billion) to mitigate the damage of the Coronavirus outbreak on the economy has been announced. The relief measures by Germany include funds of up to 100 billion euros which can be used to take direct equity stakes in companies as a way to foil foreign takeovers. It also includes another 100 billion Euros in credit to public sector development bank KfW for loans to struggling businesses. The stability fund will offer 400 billion Euros in loan guarantees to secure corporate debt at risk of defaulting, taking the volume of the package to up to 750 billion euros. The extra budget includes a 50 billion Euro program to help small businesses and the self-employed threatened with bankruptcy by the Coronavirus crisis, with direct payments of up to 15,000 euros depending on the size of the firm.

India: The Atmanirbhar stimulus package of ₹20 Lakh Crore is designed to offer fiscal and monetary support to ease running of businesses. Moreover, to save the lockdown-battered economy, the stimulus package includes tax breaks for small businesses and incentivises domestic manufacturing. The combined package works out to roughly 10% of the GDP, making it among the more substantial stimulus packages in the world. (https://www.solvezy.com/indias-rs-20-lakh-crore-covid-19-economic-stimulus-package-impact-on-msme-sector/).

Comparison of Global Coronavirus Stimulus Packages

Trends shaping the growth of MSMEs in a post COVID19 world

Over the last few months, the COVID-19 crisis has dealt a severe shock to economies across the world. It has triggered certain trends that will change the way of doing business in the near and long term, and will help shape the growth of MSMEs.

Accelerating trends in the wake of the COVID-19 crisis:

> Digitisation: Digital tools will become popular in both the B2C and B2B space, and there will be a shift of venture capital focus from service centric businesses to deep tech companies. MSMEs and start-ups, therefore, need to build solid digital capabilities and digitise parts of their business model. Besides this, expansion into new sales channels is also the need of the hour. Consumers will require goods even amidst lockdowns. Thus, creating opportunities to serve one’s markets through alternate sales channels, such as expanding to e-commerce via platforms like SOLV and boosting one’s online-marketing efforts is critical. (https://www.solvezy.com/micro-small-medium-enterprises-msmes-covid-19/).

> Rise of the locally produced goods: Reliance upon foreign sources for getting technologies or weapons will see a decline, and the domestic market is expected to surge owing to a decline in global trade. That’s because the decline in global trade due to restrictions on international shipping and travel will see a rise in demand for goods manufactured entirely locally. Manufacturers will also have to look at backward integration of their supply chains.

> Changing consumer demands and expectations: Coming of age, consumers will become more prudent and health conscious, and businesses need to cater to their changing demands and expectations. Operating as earlier won’t suffice.

> Need for upskilling and reskilling: In the post COVID world, MSMEs will need to adopt new technologies and new ways of working in order to survive and compete. Governments will need to develop specialized institutes and training programs to create a pool of skilled resources in order to help local industry.

> Limited availability of finance: Disposable income will be impacted and investors will look for safer and low risk investments. As a result, MSMEs will end up relying on Government-backed funding mechanisms.

In the light of uncertainty, it is important to stabilise and explore. While there is no single path forward for all, MSMEs should follow a few basic tenets:

  1. Stabilise one’s core offering and explore new adjacent areas to venture into
  2. Leverage local subsidies, revisit the supply chain, and focus on cash management
  3. Analyse ways to change the value proposition, delivery channels and target new customer segments

सूक्ष्म , लघु और मध्यम उद्यम और कोरोना वायरस

प्र1. COVID19 के प्रकोप का भारतीय अर्थव्यवस्था पर, विशेष रूप से छोटे और मध्यम व्यवसायों पर क्या प्रभाव है?

कॉरोनोवायरस के प्रकोप को रोकने के लिए भारत में वैश्विक संगरोध और 5-सप्ताह के राष्ट्रव्यापी लॉकडाउन ने उद्योगों को प्रभावित किया है और ऑपरेशन सचमुच एक ठहराव में आ गए हैं। ये कुछ क्षेत्रों में घरेलू और बाहरी मांग के झटके, उत्पादन बंद और नौकरी के नुकसान के साथ अभूतपूर्व समय हैं। भारतीय अर्थव्यवस्था से महामारी 100+ bn USD मिटाए जाने की संभावना है

भारत में MSME क्षेत्र में प्रभाव और भी अधिक बढ़ गया है जो कृषि क्षेत्र के बाद दूसरा सबसे बड़ा नियोक्ता है और अर्थव्यवस्था की रीढ़ है। घरेलू बिक्री में 90% की गिरावट आई है और आपूर्ति श्रृंखला में रुकावट और श्रम के मुद्दे लाखों नौकरियों को खतरे में डाल रहे हैं, जिसके परिणामस्वरूप लाखों टन वस्तुएं जैसे गेहूं, दालें और चावल और खराब होने वाली आवश्यक वस्तुएं बर्बाद हो रही हैं और खाद्य मुद्रास्फीति के स्तर को खतरे में डाल रही हैं। रिकॉर्ड ऊंचाई।

हाल ही में एसओएलवी में, हमने अपने मंच पर एसएमई के साथ एक अध्ययन किया और पाया कि उनमें से ज्यादातर हेडकाउंट में कमी जैसे गंभीर उपायों पर विचार कर रहे हैं, और आगे उनके संकटों को बढ़ा रहे हैं। यदि वर्तमान परिदृश्य जारी रहता है, तो 90% से अधिक एसएमई के पास केवल 3 महीने तक बनाए रखने के लिए कैशफ्लो हैं और उनमें से एक महत्वपूर्ण संख्या जो पहले से ही ऋणी हैं, शायद अपनी वर्तमान देनदारियों को सेवा देने में सक्षम नहीं होंगे।

प्र2. एसएमई क्षेत्र को बचाने और उन्हें संकट से निपटने में मदद करने के लिए क्या किया जाना चाहिए?

COVID संकट शायद एक बार एक सदी के Black Swan घटनाओं में है जिससे हम सभी को मिलकर निपटना होगा। विश्व बैंक और IFC की तरह विश्व स्तर पर अन्य प्रमुख सार्वजनिक और निजी क्षेत्र के बैंकों के साथ सरकारों और संस्थानों ने एसएमई क्षेत्र को अपने श्रम को बनाए रखने और कम से कम 6 महीने तक अपने संचालन को बनाए रखने में मदद करने के लिए प्रमुख प्रोत्साहन पैकेजों की घोषणा की है। भारत में, वित्त मंत्री ने एमएसएमई के लिए ऋण राहत उपायों की घोषणा की और आरबीआई ने प्रमुख ऋण सहजता और तरलता निवारक उपायों की घोषणा की है और बैंकों और छाया बैंकों को आपातकालीन क्रेडिट लाइनें खोलने का भी निर्देश दिया है। कई अन्य महत्वपूर्ण उपाय हैं जिन्हें नीति निर्माताओं द्वारा इस संबंध में किए जाने की आवश्यकता है जैसे कि जुर्माना मुक्त ब्याज भुगतान का विस्तार करने के लिए वित्तीय संस्थानों को प्रोत्साहित करना, परिश्रमी एसएमई को कार्यशील पूंजी पर ब्याज उपविभाग बनाना और इन असाधारण में इस खंड का आकलन करने के लिए वैकल्पिक क्रेडिट स्कोर को अपनाना। बार। एसएमई को वित्त के लिए समय पर पहुंच की भी आवश्यकता होती है। विकास वित्त जिसे अब भारत की ओर निर्देशित किया जा रहा है, को एसएमई क्षेत्र में प्रभावी रूप से प्रसारित करने की आवश्यकता है। इसके अतिरिक्त, बड़ी फर्मों से समय पर भुगतान और संग्रह सुनिश्चित करने के लिए, उन्हें TReDS प्लेटफॉर्म पर ऑनबोर्ड करने के लिए प्रोत्साहित / अनिवार्य किया जाना चाहिए कि यह रुपये के लिए कैसे किया गया है। परिधान खंड में 500 करोड़ + टर्नओवर कॉस।

यदि प्रतिकूलता को एक अवसर में बदल दिया जाए, तो अब से अधिक उपयुक्त समय नहीं हो सकता है। सरकार द्वारा एक बड़ा धक्का, ऋण प्रवाह, जनशक्ति मुद्दों, खराब बुनियादी ढांचे और प्रौद्योगिकी और डिजिटल अंतराल जैसे बुनियादी मुद्दों को संबोधित करने के लिए न केवल इस संकट में एसएमई का समर्थन करेगा, बल्कि उन्हें मजबूत बनाने में भी मदद करेगा।

प्र3. एसएमई को क्या करना चाहिए?

अधिकांश एसएमई ने पहले से ही सभी विवेकपूर्ण खर्चों को रोककर नकदी प्रवाह की रक्षा करने के लिए और अधिक अभिनव बनने के उपायों को अपनाना शुरू कर दिया है, और प्रौद्योगिकी समाधान ढूंढ रहे हैं जो उन्हें अपने पहुंच को बढ़ाने और नए ग्राहकों और पैमाने हासिल करने में मदद कर सकते हैं। यह एसएमई के लिए एक दूसरे के साथ डिजिटल रूप से जुड़ने का एक उपयुक्त समय है और पहले और सबसे पहले इस बात से अवगत रहें कि उनके क्षेत्र में क्या हो रहा है, नीतिगत उपायों को लागू किया जा रहा है और कैसे वे इनका लाभ उठा सकते हैं ताकि स्थिति का सर्वश्रेष्ठ बना सकें। इसके अलावा, एसएमई के लिए वैकल्पिक उधार का लाभ उठाने और विकास पूंजी के लिए अपने क्रेडिट प्रोफाइल में सुधार करने के लिए यह बहुत अच्छा समय है जिसे जल्द ही बढ़ाया जा सकता है।

प्र4.  सोळव – एक B2B डिजिटल प्लेटफ़ॉर्म एसएमई की मदद करने के लिए क्या कर रहा है?

सोळव के अस्तित्व का बहुत आधार एसएमई को बढ़ने में मदद करना है। सोळव एक वाणिज्य मंच है जो देश भर में छोटे व्यवसायों को जोड़ता है और उन्हें एक मंच, भुगतान, रसद और एंड-टू-एंड पूर्ति के साथ समर्थन करके एक दूसरे के साथ व्यापार करने में मदद करता है।

हम समझते हैं कि इस समय के लिए इस समुदाय के लिए हमारी सेवा अनिवार्य है। COVID-19 लॉकडाउन के संबंधित प्रभावों में से एक आवश्यक आपूर्ति की कमी है। लाखों नागरिक इस बात से चिंतित हैं कि वे अपनी रोजमर्रा की आवश्यक जरूरतों को कैसे पूरा करेंगे। जहां ई-कॉमर्स खिलाड़ी ऑर्डर में अचानक उछाल का सामना करने की पूरी कोशिश कर रहे हैं, वहीं कई छोटे किराना ने ऑनलाइन-ऑफलाइन हाइब्रिड मॉडल के संचालन का भी विकल्प चुना है। वे सोळव जैसे प्लेटफ़ॉर्म का लाभ उठा रहे हैं, जो इस समय उन्हें उन व्यावसायिक सेवाओं का समर्थन करते हैं जिनकी उन्हें आवश्यकता है।

छोटे किरणों के लिए, उत्पादों की बड़ी आपूर्ति श्रृंखला में दोहन सबसे अच्छे समय में और विशेष रूप से संकट के समय में एक चुनौती है। इसलिए परिवहन और श्रम की खरीद कर रहे हैं, जो अभी बहुत कम आपूर्ति में हैं। जब भारत COVID-19 के खिलाफ लड़ाई में लॉकडाउन में चला गया, तो आवश्यक सामान, जैसे कि किराने का सामान, ताजा उत्पादन और दवा तक पहुंच बाधित हो गई। भारत की आपूर्ति श्रृंखला प्रभावित हुई और छोटे स्थानीय खुदरा विक्रेता और ग्रॉसर्स बड़े निर्माताओं, व्यापारियों और थोक विक्रेताओं के कनेक्शन के बिना आपूर्ति की खरीद करने में असमर्थ थे। छोटे किरणों के लिए, उत्पादों की बड़ी आपूर्ति श्रृंखला में दोहन सबसे अच्छे समय में और विशेष रूप से संकट के समय में एक चुनौती है। इसलिए परिवहन और श्रम की खरीद की जा रही है, जो COVID-19 के नेतृत्व में बंद के दौरान गंभीर रूप से कम आपूर्ति में थे और एक समस्या को जारी रखते हैं क्योंकि अर्थव्यवस्था धीरे-धीरे लॉकडाउन से वापस आ गई है।

सोळव अपने नए तरीकों से एसएमई के लिए बी 2 बी वाणिज्य मंच का लाभ उठाकर इन चुनौतियों का समाधान करने के लिए लगातार नवाचार कर रहा है। हम अपने नेटवर्क और संसाधनों का उपयोग एक तरफ टियर 2 निर्माताओं और गांवों की सोर्सिंग इकाइयों से जुड़ने के लिए कर रहे हैं और दूसरी ओर वितरण चैनलों के लिए, किरणों, RWA, NGO और छोटे अस्पतालों को आवश्यक सामान पहुंचाने के लिए कर रहे हैं। हमारे एसएमई के माध्यम से हर दिन 20,000 से अधिक परिवारों को आवश्यक आपूर्ति की गई है।

सोळव ने लॉकडाउन की घोषणा के तुरंत बाद एमएसएमई के साथ 1: 1 साक्षात्कार भी आयोजित किया और अध्ययन के निष्कर्षों को प्रकाशित किया (जिसे टाइम्स ऑफ इंडिया ने भी उद्धृत किया था)। इस अध्ययन ने MSMEs पर COVID-19 संकट के प्रभाव के बारे में बहुत सारी अंतर्दृष्टि का खुलासा करने में मदद की और ऋण की तीव्र कमी जैसी चुनौतियों पर प्रकाश डाला। तब सोळव कम समय के भीतर ऐसी चुनौतियों के समाधान को लागू करने में सक्षम था।

सोळव ने हाल ही में FICCI-CMSME के ​​साथ MSMEs के लिए COVID-19 इमरजेंसी क्रेडिट लाइन प्रोग्राम शुरू करने की भी घोषणा की, जो देश को COVID-19 महामारी से लड़ने में मदद कर रहे हैं। कैश-फ्लो की कमी के कारण एमएसएमई सेगमेंट के लिए राष्ट्रव्यापी लॉकडाउन ने व्यापार स्थिरता को बुरी तरह प्रभावित किया है। इस परिदृश्य में, COVID-19 इमरजेंसी क्रेडिट लाइन का उद्देश्य MSME क्षेत्र द्वारा सामना किए जा रहे वित्तीय दर्द को कम करना है।

 

Micro, Small & Medium Enterprises (MSMEs) & COVID-19

Q1. What is the impact of COVID19 outbreak on the Indian economy, especially the small & medium businesses? 

Global quarantines and 5-week nationwide lockdown in India, to contain the coronavirus outbreak, have impacted industries across and operations have literally come to a standstill. These are unprecedented times with domestic and external demand shock, production shutdowns and job losses in some sectors. The pandemic is likely to wipe-out 100+ bn USD from the Indian economy

The effect is even more amplified in the MSME sector in India which is second largest employer after the agriculture sector and is the backbone of the economy. There’s been a  90% drop in domestic sales across categories and supply chain disruptions & labor issues are putting millions of jobs at risk, resulting in millions of tonnes of commodities like wheat, pulses & rice and perishable essentials getting wasted and risking food inflation levels at record highs.  

Recently at SOLV, we conducted a study with SMEs on our platform and found that most of them are contemplating severe measures like headcount reduction, further adding to their woes. If the current scenario continues, over 90% of the SMEs have cashflows to sustain them only for 3 months and a significant number of them who are already indebted, will perhaps not be able to service their current liabilities. 

Q2. What should be done to save the SME sector and help them weather the crisis? 

The Covid crisis is perhaps once in a century black swan events that all of us together need to tackle. Governments & institutions globally like the World bank & IFC along with other major public & private sector banks have announced major stimulus packages to help the SME sector retain their labor and sustain their operations for at least 6-month. In India, the Finance minister announced a slew of debt relief measures for the MSMEs and the RBI has announced major credit easing and liquidity infusing measures and has also directed banks & shadow banks to open emergency credit lines. There are several other significant measures that need to be taken in this regard by the policymakers like incentivizing financial institutions to extend penalty-free interest payment, make interest subventions on working capital to diligent SMEs and adopt alternate credit scores to assess this segment in these extraordinary times. SMEs also need to have timely access to finance. Development finance which is being directed towards India now, needs to be channeled effectively into the SME sector. Additionally, in order to ensure timely payments & collections from large firms across, they must be incentivized/ mandated to onboard on the TReDS platform similar to how it has been done for Rs. 500 cr+ turnover cos in the apparel segment. 

If an adversity can be turned into an opportunity, there cannot be a more opportune time than now. A big push, by the government, to address fundamental issues such as credit flow, manpower issues, poor infrastructure and technology and digital gaps will not only support the SMEs in this crisis but will also help them emerge stronger.

Q3. What should SMEs do?

Most SMEs have already begun adopting measures to become leaner and more innovative, to protect cash flows by stopping all discretionary spends, and finding technology solutions that can help them increase their outreach and acquire new customers and scale.  It is an opportune time for SMEs to connect with each other digitally and first & foremost be aware of what’s going on in their sector, policy measures being put in place and how they can leverage these to make the best of the situation.  Also, it’s a great time for SMEs to leverage alternate lending and improve their credit profiles for growth capital that may be extended soon. 

Q4.  What is a B2B digital platform like SOLV doing to help SMEs?

The very premise of SOLV’s existence is to help SMEs grow. SOLV is a commerce platform connecting small businesses across the country and helping them trade with each other by supporting them with a platform, payments, logistics and end-to-end fulfilment. 

We understand that our service to this community is imperative in times like these. One of the related impacts of the COVID-19 lockdown has been the shortage of essential supplies. Millions of citizens are concerned about how they would meet their everyday essential needs. While e-commerce players are trying their best to cope with the sudden surge in orders, many small kiranas have also opted for an online-offline hybrid model of operations. They are leveraging platforms like SOLV, which support them with the business services they need acutely at this time.

For small kiranas, tapping into large supply chains of products is a challenge at the best of times and especially so in this time of crisis. So are procuring transport and labour, which are in very short supply now. When India went into lockdown in the battle against COVID-19, access to essential goods, such as groceries, fresh produce and medicine, was disrupted. India’s supply chains were impacted and small local retailers and grocers were unable to procure supplies without connections to larger manufacturers, traders and wholesalers. For small kiranas, tapping into large supply chains of products is a challenge at the best of times and especially so in this time of crisis. So is procuring transport and labour, which were in critically short supply during the COVID-19 led shutdowns and continue to pose a problem as the economy slowly limps back from the lockdown.

SOLV has been constantly innovating to address these challenges by leveraging its B2B commerce platform for SMEs in new ways. We are using the strength of our networks and resources to connect to sourcing units like tier 2 manufacturers and villages on the one hand and delivery channels on the other, to deliver essential goods to kiranas, RWAs, NGOs and small hospitals. More than 20,000 families have been supplied essentials through our SMEs every day.

SOLV also conducted 1:1 interviews with MSMEs on the platform soon after the lockdown was announced and published the findings of the study (which was also quoted by The Times of India). This study helped unveil a lot of insights about the impact of the COVID-19 crisis on the MSMEs and highlighted challenges like an acute shortage of credit. SOLV was then able to implement solutions for such challenges within a short period of time. 

SOLV also announced a partnership recently with FICCI-CMSME to launch a COVID-19 Emergency Credit Line Program for MSMEs that are helping the nation fight the COVID-19 pandemic. The nation-wide lockdown has badly hit business sustainability for the MSME segment due to the lack of cash-flows to meet their fixed cost. In this scenario, the COVID-19 Emergency Credit Line is aimed at easing the financial pain being faced by the MSME sector.

Just announcing a MSME stimulus package isn’t enough

By Nitin Mittal

Proper implementation of the stimulus measures for the sector, minus the red tape, is crucial.

The Atmanirbhar stimulus package is a welcome mix of fiscal and monetary support, ease of conducting business processes, as well as some fundamental reforms. However, the stimulus measures do not address current economic needs and will not have an immediate impact.

Introducing clarity in policy communication by making it simple for the end beneficiary, ie the MSMEs, without leaving any room for subjectivity, needs to be urgently taken up by the Central and State governments. For instance, the Finance Ministry’s notification in May, amending the General Finance Rules (GFR) 2017, disallows global tenders to encourage MSMEs to take part in tenders below ₹200 crore, but has bestowed power to the respective departments in ‘exceptional case’ scenarios to consider global tender enquiry.

While 30 per cent of the overall buying demand comes from the government and allied agencies, due to policies being left to individual inference, Indian MSMEs find it hard to supply despite the ‘preference to make in India’ (PMI) guidelines calling for a 100 per cent domestic purchase for certain specified products.

One could argue that the lack of scale that Indian MSMEs have compared to global MSMEs begs for an alternate lending lens to be applied for providing growth capital to MSMEs. This has been amply supported by the Centre through the ‘Fund of Funds’ initiative, but it also has left a major chunk of debt financing to current traditional underwriting measures of the market.

A substantial amount of liquidity has been infused into the banking system in the hope that it will in turn lend more profusely to industries, especially MSMEs. The loan guarantee scheme is another such measure expected to act as a catalyst for lending to this sector, but its success will depend on clear guidelines on implementation to banks and NBFCs, and communication on the steps to leverage this stimulus package for the MSME segment. Banks may turn into growth consultants for MSMEs in the process.

On the demand side, with the latest sustenance boost announced on the heels of the government’s second stimulus package, the Reserve Bank of India (RBI) has provided further relief to borrowers with a three-month loan moratorium extension on top of the three months announced earlier. The repo rate cut of 40 bps is likely to improve credit appetite in the retail segment and help kick-start the economy.

The relief measures this time also included exporters and importers, with the provison of a ₹15,000-crore credit line to EXIM bank, extension of export credit sanctions by three months and a six-month extension for completion of outward remittances for importers. This will go a long way to ease liquidity in the MSME sector, which contributes to 40 per cent of India’s exports.

In this scenario, what MSMEs are asking for can broadly be bucketed as below:

The immediate availability of subsidies, with simplified processes for getting them without hindrance.

Over 95 per cent of our MSMEs are not in the formal finance fold currently; an urgent review of alternate lending mechanisms and credit scoring criteria needs to be undertaken by the Centre to unlock liquidity in the system

Clearance of all due payments stuck with the government and large corporates on priority.

Full restoration of mobility with rules defined and strict adherence monitored, as it is critical to running a business.

For stressed lenders, the challenge of any government-sponsored scheme lies in its last-mile implementation. Delays or denials because of red-tape will make financial institutions wary of any government credit enhancement schemes, and render all the good work done thus far ineffective.

Article first published here: www.thehindubusinessline.com/

COVID-19 impact | Reviving post-lockdown MSME manufacturing

By Nitin Mittal

The need of the hour is clarity in policy communication by making it simple for the MSMEs, without leaving any room for subjectivity.

The COVID-19 pandemic has wreaked havoc on the economy. Taking steps to protect our industries and commerce is an immediate and critical need of the hour. To this end, the government recently announced its intention to spend almost 10 percent of India’s gross domestic product (GDP) in the fiscal year 2020 on economic relief measures towards reviving economic growth.

A sector that is reeling under the impact of the COVID-19 outbreak is the Micro, Small and Medium Enterprises (MSME), which contributes to around 35 percent of India’s manufacturing output. The MSME sector, which is also the second-largest employment generator in the country after agriculture, needs special attention from the government.

The stimulus package announced is a mix of fiscal support, monetary support, ease of conducting business processes, as well as some fundamental reforms. The need of the hour is clarity in policy communication by making it simple for the end beneficiaries, the MSMEs, without leaving any room for subjectivity, which needs to be urgently taken up by the central and state governments. For instance, the Finance Ministry’s notification in May, amending the General Finance Rules (GFR) 2017, disallows global tenders to encourage MSMEs to take part in tenders below INR 200 crores, but has bestowed power to respective departments in ‘exceptional case’ scenarios to consider global tender enquiry (GTE). Policies cannot be left to individual inference when a critical step in economic progress like quality sourcing is being sought from domestic players, especially the MSME sector which is gearing to be a major supply chain player for domestic and global markets.

To make this a reality, certain measures with respect to limiting imports may be a necessary step, at least for the foreseeable future. China, for example, is one of our top three trading partners and the trade deficit with the country has increased manifold over the last few years. To stem this, the Government of India proposed amendments in the Customs Act which gives it the power to ban import and export of certain items, “under exceptional circumstances”. These measures are intended to make our supply chains more self-reliant and less dependent on imports, but it is also important to remember the unparalleled scale and capability of manufacturing-driven countries like China; it will take significant policy interventions and drastic structural changes to match their scale, expertise and skills, to be globally competitive.

This is a feat that India is not new to; the challenge has previously been overcome successfully by the likes of the textile industry in India, which is the second largest exporter of textiles in the world. As a country, we must collectively find ways to extrapolate the success stories of the textile industry to other import-heavy industries, while also learning from its failures to kickstart growth in the new normal.

Here are some of the essential steps needed to get the manufacturing MSMEs back on track.

Financial incentives

  • RBI needs to immediately issue guidelines for higher provisioning revisions to banks, in the absence of which liquidity injection into the system is getting delayed
  • Instant availability of subsidies, with simplified processes for getting them without hindrance
  • Speedy cashflow issue resolution through GST refunds and short-term collateral free, low-interest loans to both large corporates and MSMEs

Article first published on: www.moneycontrol.com/

How to get MSME Certificate in India?

Micro-Small & Medium Enterprises (MSMEs) have a major contribution in the socio-economic development of India. MSME registration for both manufacturing and service enterprises is highly important since it allows SMEs to avail benefits from various government initiated schemes.

Changed Definitions of MSMEs

In October 2019, Union Minister Nitin Gadkari revised the definition of micro, small, and medium enterprises to grant a unified description for everything related to taxation, investment, etc. This was implemented to refine the operational scenarios for Indian enterprises. It led to change of the classification criterion for MSMEs to investment in plant and machinery.

On 13th May 2020, Finance Minister Nirmala Sitharaman added the additional criterion of turnover along with the investment. This definition was announced under the Atmanirbhar Bharat Abhiyaan to faciliate MSMEs to grow in size and help them deal with the difficulties levied upon by the pandemic.

As per this, there won’t be any distinction between manufacturing and services sector MSMEs, and  will cover:

– Micro units with investment up to ₹1 crore and turnover up to ₹5 crore

– Small units with investment up to ₹10 crore and turnover up to ₹50 crore

– Medium units with investment up to ₹20 crore and turnover up to ₹100 crore

The definition, however, further got revised on June 1, 2020 on representations that the revision is still not in tune with the market and pricing conditions, and should be further revised upwards. As per the revised definition, it will be ₹50 crore of investment and ₹250 crore of turnover.

This step will help attract investments and create more jobs in the MSME sector. The following table provides the details of revised limits:

CategoryOld CapitalOld TurnoverNew CapitalNew Turnover
Micro₹25 Lakh₹10 Lakh₹1 Crore₹5 Crore
Small₹5 Crore₹2 Crore₹10 Crore₹50 Crore
Medium₹10 Crore₹5 Crore₹50 Crore₹250 Crore

Documents Required for MSME Certificate

  • Aadhaar card
  • Rent agreement
  • Property paper
  • Cancelled Cheque
  • Company Registration i.e., Sale or Purchase Bill and PAN card
  • Business Address Proof

For self-owned property Lease deed, property tax receipt, possession letter, allotment letter
For rented property: NOC from the landlord, rent receipts, utility bills or document evidencing the landlord’s ownership.

Additional Documents

  • Copies of Sale and Purchase Bills
  • Partnership Deed
  • Memorandum of Association (MoA)
  • Articles of Association (AoA)
  • Copies of Licenses and Bills of Machinery Purchased

Charges for MSME Certificate

MSME certificate can be obtained for an all-inclusive cost of ₹1999 per certificate. This can be paid via secured online gateways.

How to register as an MSME?

MSMEs can register simply by visiting https://msme.gov.in/online-application and filling the application form. Once the registration process is complete, applicants can get MSME certificate within 5 working days. This certificate does not expire and is relevant for both manufacturing and service sector enterprises.

Benefits of MSME Certificate

  • It is helpful in bidding for and obtaining government tenders
  • An MSME certificate gets 15% import subsidy on loans for fully automatic machinery
  • It becomes easy to get licenses, approvals and registrations for any SME
  • An MSME with the registration certificate can get the ISO certificate expenditure reimbursed
  • It helps in getting low interest rates
  • Registered MSMEs gets tariff and tax & capital subsidies, as well as exemption under Direct Tax Laws

What is Udyog Aadhar?

Udyog Aadhar was launched to simplify the process of registration for the business owners as MSMEs. It is a government registration provided with a recognition certificate and a unique number to certify micro, small and medium enterprises.

Benefits of Udyog Aadhar

  • Collateral free bank loan up to 1 crore
  • Preference in procuring government tenders
  • 1% exemption on interest rate on bank overdraft
  • Reduced interest rates on loans
  • Subsidised electricity bills
  • Protection against the delay in payment from buyers
  • Tax rebates
  • 50% discount on government fees for trademark and patent
  • Speedy resolution of disputes
  • Octroi benefits
  • Businesses can claim stamp duty and registration charges
  • Subsidy from NSIC and credit ratings
  • Offers eligibility for IPS subsidy
  • Reservation of products for exclusive manufacturing by MSME and SSI
  • Business can avail Excise Exemption Scheme
  • Enjoy easy bank mortgage
  • Businesses can become a part of International business fairs
  • States and Union territories have their package of facilities and incentives for small scale which can be availed 

All about HSN codes under GST

Harmonized System of Nomenclature, or HSN is a code that was developed by the World Customs Organization (WCO) with an aim to classify goods across the world in a methodical manner. This globally accepted code consists of six digits classifying 5,000+ products, and this classification is used for taxation purposes in identifying the rate of tax applicable to a product in a country. Besides, this code is also useful in determining the significance of an item traded by a nation.

Benefits of HSN Code

The primary purpose of the HSN code is the systematic classification of goods, gather trade data and solve problems, resulting in an efficient international trade system. It is used worldwide with over 200 countries participating to avail the benefits below:

  • Access to international trade statistics
  • Provision of a rational basis for customs fee
  • Uniform classification of products

At present, approximately 98% of international trade stock is classified in terms of HSN. That means, each commodity in every country has the same number for same variety of goods.

HSN in India

HSN in India was originally a 6-digit code used to classify commodities for Customs and Central Excise. However, two more digits were added on later by Customs and Central Excise to make the codes more precise. The current coding system includes 8 digits.

HSN Codes for GST in India

India has already been using HSN system in the Central Excise and Customs regime, but with the arrival of GST, almost all goods in India are classified using the HSN classification code. It is used for the Goods and Service Tax (GST) calculations.

It must be noted that the HSN number needs to be clearly mentioned on GST Invoices while preparing Tax Invoice and the turnover of the previous year will be considered for this purpose.

Provisions related to HSN under GST are

Under GST law, the HSN code to be used by a taxpayer will be on the basis of taxpayer’s turnover. Following HSN codes need to be declared while filling GST:

Business Turnover          No. of HSN code Digits to be Declared
Up to ₹1.5 crore0
From ₹1.5-5 crore2
More than ₹5 crores4

This implies, those with a turnover of less than INR 1.5 Crores need not follow HSN.

Importance of HSN under GST

HSN codes under GST make taxation regime systematic. The introduction of these codes have eliminated the need to enter the detailed description of the products in the tax receipt, making the process time saving and smooth for a business owner while filling returns.

The HSN code needs to be declared on the tax invoice and must be reported while filing the GST returns.

The taxpayers with turnover between ₹1.5 crore and ₹5 crore in the preceding financial year, specifying HSN codes for the first year of GST operations is optional, but from the second year of GST operations, mentioning HSN code is mandatory for all taxpayers with.

For taxpayers with turnover of over ₹5 crores in the preceding financial year, HSN code is mandatory.

HSN sections

  • Section I (Chapters 1 to 5) covers live animals and animal products
  • Section II (Chapters 6 to 14) covers vegetable products
  • Section III (Chapter 15) covers animal or vegetable fats and oils
  • Section IV (Chapters 16 to 24) covers beverages, spirits, vinegar, and tobacco
  • Section V (Chapters 25 to 27) covers mineral products
  • Section VI (Chapters 28 to 38) covers chemical and para-chemical products
  • Section VII (Chapters 39 to 40) covers plastics and rubber, and articles thereof
  • Section VIII (Chapters 41 to 43) covers certain animal hides and skins
  • Section IX (Chapters 44 to 46) covers wood, cork, manufactures of straw, and articles thereof
  • Section X (Chapters 47 to 49) covers pulp of wood, paper, paperboard, and printed products
  • Section XI (Chapters 50 to 63) covers textiles and textile articles
  • Section XII (Chapters 64 to 67) covers footwear, headgear, umbrellas, walking sticks, prepared feathers, artificial flowers, and articles of human hair
  • Section XIII (Chapters 68 to 70) covers articles made of minerals, stone, plaster, cement, etc., and ceramic and glass products
  • Section XIV (Chapter 71) covers precious metals and stones
  • Section XV (Chapters 72 to 83) covers base metals and articles thereof
  • Section XVI (Chapters 84 to 85) covers machinery and mechanical appliances, electrical equipment, sound recorders and reproducers, television image and sound recorders and reproducers, and parts and accessories of such articles
  • Section XVII (Chapters 86 to 89) covers vehicles, aircraft, vessels, and associated transport equipment
  • Section XVIII (Chapters 90 to 92) covers optical, photographic, cinematographic, and musical apparatus and equipment; measuring, medical, surgical, and other instruments; and clocks and watches
  • Section XIX (Chapter 93) covers arms and ammunitions
  • Section XX (Chapters 94 to 96) covers miscellaneous manufactured articles
  • Section XXI (Chapters 97 to 99) covers arts, collector’s pieces, and antiques (Note: Chapter 99 is reserved for national use)

What is SAC code?

Services Accounting Code or SAC is a code under which services falling in the purview of GST are classified. Both HSN and SAC codes are used to classify goods and services under the GST regime in India.

What is SAC in GST?

While HSN code is for the products, SAC is for the classification of services. This code is also used uniformly for measurement, recognition, and taxation.

What benefits do start-ups get on registering as MSMEs?

An MSME is an independently owned and operated business which has been established for profit and sells the products for the local customers. According to the updated definition, SMEs in India comprise both manufacturing and service enterprises and the classification is done based on the turnover and investment amount.

In October 2019, Union Minister Nitin Gadkari revised the definition of micro, small, and medium enterprises to grant a unified description for everything related to taxation, investment, etc. This was implemented to refine the operational scenarios for Indian enterprises. It led to change of the classification criterion for MSMEs to investment in plant and machinery.

On 13th May 2020, Finance Minister Nirmala Sitharaman added the additional criterion of turnover along with the investment. This definition was announced under the Atmanirbhar Bharat Abhiyaan to faciliate MSMEs to grow in size and help them deal with the difficulties levied upon by the pandemic.

As per this, there won’t be any distinction between manufacturing and services sector MSMEs, and  will cover:

– Micro units with investment up to ₹1 crore and turnover up to ₹5 crore

– Small units with investment up to ₹10 crore and turnover up to ₹50 crore

– Medium units with investment up to ₹20 crore and turnover up to ₹100 crore

The definition, however, further got revised on June 1, 2020 on representations that the revision is still not in tune with the market and pricing conditions, and should be further revised upwards. As per the revised definition, it will be ₹50 crore of investment and ₹250 crore of turnover.

This step will help attract investments and create more jobs in the MSME sector. The following table provides the details of revised limits:

CategoryOld CapitalOld TurnoverNew CapitalNew Turnover
Micro₹25 Lakh₹10 Lakh₹1 Crore₹5 Crore
Small₹5 Crore₹2 Crore₹10 Crore₹50 Crore
Medium₹10 Crore₹5 Crore₹50 Crore₹250 Crore

SMEs operate on a defined path, follow a structured business model with an intent to earn profits. The objective is to gain a financially viable position in the market without much risk.

Since small businesses follow a designated path that many in the same industry have followed, this reduces the amount of risk involved and ensures proven returns.

These setups rely on business finance to fund their company’s growth.

For an MSME to be called one and enjoy the benefits given by the government of India, it must be registered and have an MSME certificate. The benefits a registered MSME can avail are:

–           They can bid for obtaining government tenders.

–           MSMEs can get 15% import subsidy on loans for fully automatic machinery.

–           It becomes easy for them to get licenses and approvals.

–           They can avail reimbursement for the ISO certificate expenditure.

–           They get low interest rates on loans.

–           MSMEs can get the benefit of tariff and tax and capital subsidies, and an exemption under Direct Tax Laws.

How to register as an MSME?

MSMEs can register simply by visiting https://msme.gov.in/online-application and filling the application form. Once the registration process is complete, applicants can get MSME certificate within 5 working days. This certificate does not expire and is relevant for both manufacturing and service sector enterprises.

Registration Process

  • To do the registration, visit https://msme.gov.in/online-application and fill the form.
  • If a business owner wants to register for more than one industry, separate form must be filled.
  • Details required for the registration are Personal Aadhar Number, Industry name, Address, bank account details.
  • Once the details are filled and uploaded, you will receive a registration number.

Note: No registration fee is required for this process.

Benefits that start-ups get on registering as MSMEs

While Indian MSMEs are growing rapidly in Textile, Garments, IT, Retail, Pharmaceuticals, and service sectors with government assistance, start-ups are still facing difficulties in fundraising, resource hiring, etc. This makes it vital for start-ups to subsumed as MSMEs.

Start-ups that register as MSMEs can avail the following benefits:

  • Benefits and incentives from the banking sector, such as Priority Sector lending where bank sanctions loan at subsidised rates basis the revenue model of business. Additionally, they get preferential treatment in events of delays in repayment.
  • Benefits from the state government for the start-ups registered under the MSMED Act, such as special assistance in terms of tax/tariff subsidies, electricity exemptions, capital investments, state licenses. They also get easy approvals in fund applications from regulatory institutions.
  • Benefits from the central government for the start-ups registered under the MSMED Act, such as tax exemptions, easy collateral-free loans, loans for their expansion and technology advancement.

Other benefit schemes include:

  • Credit Guarantee Scheme (CGS): They are offered guarantee of credit assistance from SIDBI’s CGTMSE fund for businesses into manufacturing and service activities.
  • Coir Udyami Yojana: This helps Coir Units with credit facility of up to 25% of the value of project to a maximum of ₹10 lakh.
  • Market Development Assistance: Start-ups get access to international markets and can exports goods through government agencies with ease.
  • Raw Material Assistance by NSIC: Easy finance facilitation to process raw material for production.
  • Infrastructure Development Scheme: Facilitating access to software parks, lease spaces, and assistance in holding exhibitions in metro cities.
  • Revamped Scheme of Fund for Regeneration of Traditional Industries (SFURTI): To help traditional industry and artisans, get organised and have long term sustainability, they are offered easy access to tools and equipment, improved technology, etc.

Start-ups registering as MSMEs to avail COVID relief

In order to avail the relief measures announced by the Finance Minister under the Aatmanirbhar Bharat Scheme, start-ups have to register as MSMEs on the Udyog Aadhaar portal. They can avail are:

  • ₹3 lakh crores of collateral free loans
  • ₹20,000 crore of subordinated debt for stressed MSMEs
  • SIDBI’s Fund of funds for MSMEs with a corpus of ₹10,000 crore

Apart from this, the government has also announced several incentives such as reserving government procurement tenders up to ₹200 crore for domestic companies. This makes start-ups eligible to participate in the tenders.

Furthermore, MSME receivables from government and public sector enterprises are cleared within 45 days.

One-stop-shop for the MSMEs – CHAMPIONS

The Prime Minister, Narendra Modi, launched the technology platform CHAMPIONS (Creation and Harmonious Application of Modern Processes for Increasing the Output and National Strength) to make the smaller units big by solving their grievances. This one-stop solution from the MSME Ministry also aims to encourage, support, help and handhold MSMEs in the current scenario.

Objectives of CHAMPIONS:

  • Grievance Redressal: To resolve the issues faced by the MSMEs including finance, raw materials, labour, regulatory permissions.
  • Assistance in tapping new opportunities: To help MSMEs capture new opportunities in medical equipment and accessories manufacturing, such as PPEs, masks, etc, and facilitate them to supply in National and International markets
  • Identification and Encouragement to MSMEs with potential: Those MSMEs who are able to withstand the current situation will be promoted to become national and international champions.

Start-ups registering as MSMEs can benefit from this platform.