Credit Guarantee for MSMEs increased to Rs 2 cr; applicable for NBFC loans also

New Delhi, Jan 2 (KNN) The credit guarantee for micro, small and medium enterprises (MSME) has been increased from rupees one crore to rupees two crores.

The announcement was made by Prime Minister Narendra Modi during his address to the nation on the eve of the New Year.

The Prime Minister said, “For MSMEs, we have decided to increase credit guarantee for them to two crore from one crore.”

He added that Non-Banking Financial Company (NBFC) loans will also be covered under this scheme.

“Banks should give loans, we take guarantee,” he said adding that the government has told banks that cash credit limit for small enterprises should be increased to 25 per cent from 20 per cent.

During the course of his speech PM reiterated the government’s decision to give tax relief to small businessmen on cashless transaction.

Income of businesses with turnover of up to Rs 2 crores was calculated at 8 per cent of the turnover. Now, for such businesses income from digital transactions will be calculated at 6 per cent. This will effectively reduce their tax liability by 25 per cent, PM Modi said.

“Now on their (small businessmen) digital transactions, tax will be calculated on six percent of their income (which was earlier calculated on eight percent),” said PM.

He also announced the schemes for pregnant women, under which Rs 6000 will be credited to (pregnant) women’s accounts for registration, delivery, vaccination, nutrition. However, the scheme will only be launched in 53 districts in the initial phase and only rupees 4000 will be given. (KNN/RAS)