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Govt to set up Rs 1 lakh cr fund to clear pending MSME dues

Updated: Apr 25, 2020 06:07:42am

Govt to set up Rs 1 lakh cr fund to clear pending MSME dues

New Delhi, Apr 25 (KNN) The government is planning to set up Rs 1 lakh crore fund to clear outstanding dues of Micro Small and Medium Enterprises (MSMEs) owed by the central and state government undertakings as well as major industries.

"We have decided to set up a fund of Rs 1 trillion. We will ensure this fund with the government paying the premium. We will come up with a formula for sharing of the interest burden between the paying entity and payment-receiving entity and banks against this fund, for the payments due to MSMEs which are stuck with the PSUs, centre and state governments and major industries," Gadkari said while speaking at an ASSOCHAM webinar.

Gadkari also said he had asked Labour Minister Santosh Gangwar to utilise the Rs 80,000 crore lying with the Employees State Insurance Corp (ESIC) to address the crisis faced by the MSMEs to pay April salaries.

The government is also planning to redefine MSME, based on their annual revenue by replacing the existing definition that relied on self-declared investment on plant and machinery. This will align them better with the GST regime, besides ensuring ease of doing business, he said.

On April 24, the minister had said that Centre is working on a scheme to reimburse pending payments with interest to MSMEs.

''The default on pending payments is one of the big problems faced by MSMEs,'' said Gadkari in an interaction via video conferencing with the representatives of Bharat Chamber of Commerce (BCC) on Thursday.

''I have asked the MSME Ministry officials to work on formulating a scheme of Rs 1 to 2 lakh crore,'' he added

The Minster had also said that if there is a pending bill anywhere, we can reimburse that amount with the interest cost.

''We will find out some solution, some of the cost will be borne by the government, some of the cost will be borne by the industry, some of the cost will be borne by the supplier and we will take the guarantee for that and MSMEs will get their payment. We are working on it. So that can be a good relief to MSMEs," said the minister


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