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18/02/2017 06:09am

Govt has increased cash credit limit for MSMEs to 30% of turnover: Meghwal

image Govt has increased cash credit limit for MSMEs to 30% of turnover: Meghwal

Chennai, Feb 18 (KNN) In order to encourage MSMEs conduct business digitally, government has increased the cash credit limit for micro, small and medium enterprises (MSMEs) to 30 per cent of turnover from the existing 20 per cent, Minister of State for Finance Arjun Ram Meghwal said today.

While addressing at an event organized by Madras Management Association, Meghwal said, “We have taken the decision that the CC (cash credit) limit be increased to 30 per cent of turnover from existing 20 per cent."

"They (banks and financial institutions) are calculating the CC limit on the basis of turnover. We have decided that if you do your (MSME) business digitally then you can get the cash credit limit up to 30 per cent. It is a big move," he said, as quoted in a media report.

By taking up digital transaction, the balance sheet of companies would be "clean" and MSMEs would get loans from banks.

"Take your balance sheet. Banks and financial institutions will sanction loans up to 30 per cent of your turnover. That is a good move towards ease of doing business".

On the calculation of taxes for MSMEs, Meghwal said the government was at present calculating it at 8 per cent for revenue of up to Rs 2 crore.

"If you do business digitally, then the tax liability will be reduced from 8 per cent to 6. Truly speaking, we have reduced the tax liability by 25 per cent. That is also a very big relief to MSMEs," he said.


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