FM asks PSUs to implement ''AtmaNirbhar Bharat
New Delhi, May 23 (KNN) The Union Finance Minister Nirmala Sitharaman has asked Public Sector Undertakings (PSUs) to implement "AtmaNirbhar Bharat" relief package to revive the COVID-19-hit economy.
At a review meeting held on Friday, via video conferencing with top officials of all state-owned banks, Sitharaman also took stock of the banks' readiness to operationalise announcements made under the Rs 20 lakh-crore Aatmanirbhar Bharat package.
The Union Cabinet headed by Prime Minister Narendra Modi on Wednesday cleared Rs 3 lakh crore to Micro, Small and Medium Enterprise (MSME) and interested MUDRA borrowers by way of Emergency Credit Line Guarantee Scheme (ECLGS).
The 100% guarantee scheme at a concessional rate of 9.25% for MSMEs under the Rs 3 lakh crore scheme was the second-biggest component of the Rs 20 lakh-crore package announced last week.
Currently, the rate of interest on loans given by banks to MSMEs varies from 9.5% to 17%, depending on the risk perception.
Under the Scheme, 100% guarantee coverage to be provided by National Credit Guarantee Trustee Company Limited (NCGTC) for additional funding of up to Rs 3 lakh crore to eligible MSMEs and interested MUDRA. borrowers, in the form of a Guaranteed Emergency Credit Line (GECL) facility.
The government will also provide a corpus of Rs 41,600 crore for the scheme over the current and coming three financial years.
''The main objective of the Scheme is to provide an incentive to Member Lending Institutions (MLIs), i.e., Banks, Financial Institutions (FIs) and Non-Banking Financial Companies (NBFCs) to increase access to, and enable availability of additional funding facility to MSME borrowers, in view of the economic distress caused by the COVID-19 crisis, by providing them 100 per cent guarantee for any losses suffered by them due to non-repayment of the GECL funding by borrowers,'' the Finance Ministry had said in a statement on Wednesday.
Other scheme to help the stressed MSME sector also included Rs 20,000 crore subordinate debt for stressed or loan defaulting MSMEs, which could benefit 2 lakh such businesses.
A fund of funds for MSME is also being created, which will infuse Rs 50,000 crore equity in MSMEs with growth potential.
Notably, on Wednesday, the Finance Ministry had advised administrative ministries for issuing direction to their respective CPSEs to clear pending dues of MSMEs.
"All the concerned Administrative Ministries of the CPSEs have again been advised on May 20 to direct their respective CPSEs to release the pending payments to MSMEs immediately in the line with the government announcement made, recently," Sitharaman had tweeted.