The financial package under the mission of “Aatmanirbhar Bharat” has announced various measures for MSMEs for the uplift them from the economic stress during the COVID-19 situation. MSME stands for Micro, Small and Medium Enterprises and are the backbone of the economy for developing countries like India. Relief measures for the MSMEs were the highlight in the first tranche of the package:

• Revised definition for MSMEs
• Upward revision of investment limits
• Criteria for turnover additionally introduced
• No differentiation between manufacturing and service enterprises
• Financial measures for MSMEs with respect to pandemic situation

As per the notification issued by the Ministry of Micro, Small and Medium Enterprises, a MSMSE will be defined as tabulated below and will come into effect from 01 July 2020:

Composite criteria – Investment and Annual Turnover
Category	Micro	Small	Medium
Manufacturing and Service Enterprises	Investment < 1 crore and Annual turnover < 5 crore	Investment < 10 crore and Annual turnover < 50 crore	Investment < 50 crore and Annual turnover < 250 crore

* The definition of investment and annual turnover are yet to be notified.

Some of the financial measures announced as part of the package are in brief below:

• 3 lakh crore collateral free automatic loans
• 20,000 crore subordinate debt
• 50,000 crore equity infusion through MSME fund of funds
• Disallowance of global tenders for government procurement tenders upto Rs. 200 crores

Why register for MSMEs?

• Collateral free bank loans with reduced interest rates
• Preference over non-MSMEs for government tenders
• Tax rebates and other incentives offered by the government
• Delayed payments attract compound interest which is as high as 3 times of the bank rate notified by the Reserve Bank of India

Some of the government schemes beneficial for MSMEs are:

• Udhyog Aadhar Memorandum Scheme – Replacement of the registration process which is made completely online and hassle free.
• Incubation – Financial assistance provided to new ideas and product designs promoting technology and research.
• Women Entrepreneurship – Income Generating Scheme – Training-cum-income generating scheme aiming to make women economically well founded and independent.
• Credit Linked Capital Subsidy Scheme – Aiming to provide capital in terms of plant and machinery with the state of art technology.
• Zero Defect Zero Effect Scheme – ZED – To manufacture goods having zero defect and in an environment friendly to enable having a zero-effect environment.

Conclusion: The above mentioned benefits, relief measures, financial assistance and various schemes, are only illustrative. Post COVID-19, the government would be keen on encouraging this sector as inferred by the number of policies and measures taken by it. A multi-fold potential growth can be anticipated in this sector and businesses may consider registering as a MSME to avail maximum benefits subject to conditions.