All important decisions taken on farmers, MSMEs during Cabinet meeting
What's the story
Union Ministers Prakash Javadekar, Nitin Gadkari, and Narendra Tomar addressed media, a short while after Prime Minister Narendra Modi chaired a Cabinet meeting. Javadekar said the government took initiatives to help farmers and MSMEs, both of which have a great role to play in India's dream of becoming aatmnirbhar. He reminded the definition of MSME was changed to extend the benefits to several companies.
Context
Earlier, a Rs. 20 lakh crore package was announced
Last month, PM Modi announced a Rs. 20 lakh crore package to give relief to the bruised economy. In his televised address, he focused on making India self-reliant and urged citizens to switch to Indian products. Details of this package, which accounted for 10% of the nation's GDP, were announced in tranches by Finance Minister Nirmala Sitharaman and MoS (Finance) Anurag Thakur.
MSME
Rs. 20,000 crore subordinate debt announced to help stressed MSMEs
Javadekar said the government took steps to help MSMEs, one of the most prominent ones being the infusion of Rs. 20,000 crore. "Cabinet today has approved Rs. 20,000 crore subordinate debt for stressed MSMEs, this will benefit 2 lakh stressed MSMEs," the minister said. Further, the Cabinet provided Rs. 50,000 crore equity investment help for MSMEs. They can also get listed.
Hawkers
Street vendors will be given loans to expand business
Javdekar also said that hawkers and street vendors will be given loans to expand their businesses. "The street vendors can seek loans up to Rs. 10,000 and repay in easy installments. Digital transactions will be encouraged with these loans," Javadekar said. This move will help over 50 lakh vendors. "Salons, cobblers, laundry and paan vendors to also be included in these schemes," he said.
Farm sector
Farmers can repay loan by August 31: Tomar
Meanwhile, Tomar revealed that the Minimum support price (MSP) for 14 Kharif crops was increased by 50-83%. Farmers can repay the loan by August 31, now. Saying that farmers were supported during the COVID-19 crisis, Tomar added, "The farmers have been able to have a bumper crop this year. 342 metric tonnes was the produce of wheat earlier and now it's 360 metric tonne."
Details
Subsidy of Rs. 28,000 crore was given to farmers: Tomar
Revealing that farmers are given loans at 7%, the agriculture minister said if it's repaid on time, they will be given another benefit of 3% and the total interest will become 4%. "The interest rate is 9% and the government gives a benefit of 2% and farm loan is provided at 7%," he explained. Last year, a subsidy of Rs. 28,000 crore was given.
What he said
6 crore MSMEs generate 11 crore jobs in India
Separately, Gadkari said there are nearly 6 crore MSMEs that generate 11 crore jobs and they contribute 48% to the country's exports. "The MSMEs which are exporting and have a good turnover will be provided money from a government fund of Rs. 10,000 crore, which will be increased to Rs. 50,000 crore," he added. The investment limit for medium enterprises was hiked to Rs. 50 crore.
Quote
Government will help MSMEs that have good turnover
"The units which have a good turnover and GST, will be listed and the government will buy shares in the company which will be a revolving fund and this will benefit the MSMEs entering the stock market," Gadkari went on.