Union Cabinet Approves Stimulus Packages for MSME, Farmer And Street Vendors
As India has entered Unlock 1, the Union Cabinet also held a meeting to take important decisions. As per the reports, the cabinet meeting has come up with various steps to transform the MSME sector and ensure better quality of lives for farmers and street vendors.
PM Narendra Modi chaired the meeting. This is also the first meeting after the Modi government has entered its second year in office. All these decisions were made under the Atmanirbhar Bharat package.
Important Highlights From Union Cabinet Meeting
During a press release, Union Ministers Narendra Singh Tomar, Prakash Javedekar, and Nitin Gadkari announced the key decisions claimed as being ‘historic’ for farmers, vendors and MSMEs.
“Gaon, gareeb, kisan (villages, the poor and the farmers) are the priority of the government,” said the Union ministers.
Below are key points from the cabinet meeting on stimulus packages:
During the meeting, the cabinet revised the definition for micro, small and medium Enterprises (MSMEs). The new one is:
“Businesses with an investment of less than Rs 10 crore and turnover less than Rs. 50 crore will now be classified as small enterprises.”
As per Union Minister Prakash Javedkar, this new definition will help MSMEs in getting benefits from the government.
The cabinet has also cleared a Rs.20,000-crore debt scheme for the MSMEs. This will help around 2 lakh MSMEs in getting funds during stressed financial times. In addition to this, the cabinet has also approved a Funds of Funds or equity investment assistance of Rs. 50,000 crore for MSMEs.
For the farm sector, Union Minister Narendra Singh Tomar said that cabinet has approved a hike of MSP, i.e., minimum support prices for 14 Kharif crop by 50-83 per cent.
For instance, the revised MSP rate for Paddy now is at Rs 1,868 per quintal. For Jowar, the price is at Rs 2,620/quintal and Bajra is at Rs 2,150/quintal.
For Ragi, Moong, Groundnut, Til, Cotton and Soyabean, the MSP will face 50 per cent increase over the cost.
In addition, the government is also planning to extend the crop loan interest benefits till August 31. Farmers also get extension date for repaying short term loans for agriculture and farm related activities. Those who will pay their loan by August 31, 2020, will get a 4 per cent waiver.
For the better harvest, farmers can also take new loans and get relaxation under Kisan credit card scheme. Also, farmers can now sell their harvest anywhere they like, as promised by the government.
For Street Vendors
Street vendors were the other section which will get benefit from cabinet meeting this month.
The cabinet launched a special scheme called – PM SVANidhi, or PM Street Vendors Atmanirbhar Nidhi, for vendors.
Under this scheme, urban/peri-urban & rural street vendors who were vending on or before March 24, 2020, can restart their livelihoods. For this, they will be given a credit loan of Rs. 10,000.
The vendors can repay loan as monthly instalments for a year. If they repay loans through digital payment, they will also get cashback incentive.
Also, the vendors who will pay the loan on time will get 7 per cent annual interest as a subsidy in their accounts. And those who won’t pay on time will not be penalised.
Interestingly, this is the first time that government has taken such decisions for the street and footpath vendors. More than 5 million vendors will get benefit of this scheme as per the government.