Finance Minister Nirmala Sitharaman on Wednesday announced an economic relief package amid nationwide coronavirus lockdown in which her prime focus was on to save jobs in the MSME sector and help it to get back on track. In the press briefing, Sitharaman prescribed a new definition for MSME companies, which was a long-pending demand, so that more number of companies could get the benefit from the relief package by the Centre.
The finance ministry announced collateral-free automatic loans to MSMEs worth Rs 3 Lakh Crore and the companies fulfilling the new criteria can get this benefit. Sitharaman said, "Govt of India and Central Public Sector Enterprises will honour every MSME receivable in the next 45 days."
According to the finance minister, as per the necessary amendments for MSME, the investment limits will be revised upwards. With that, additional criteria for turnover will be introduced. Apart from that, the distinction between the manufacturing and service sector will be eliminated.
As per the amendment, companies with investment up to Rs 1 crore and with a turnover of up to Rs 5 crore will now qualify to be Micro industries.