World’s first sovereign Blue Bond by Seychelles
The Republic of Seychelles has launched the world’s first Sovereign Blue Bond, a financial instrument designed to support sustainable marine and fisheries projects. With this, Seychelles became the first nation to pioneer such a novel financing instrument.
The bond raised USD 15 million from international investors. The bond demonstrates the potential for countries to harness capital markets for financing the sustainable use of marine resources. The Blue Bond is a part of an initiative that combines public and private investment to mobilise resources for empowering local communities and businesses. It will greatly assist Seychelles in achieving a transition to sustainable fisheries and safeguarding oceans. The Seychelles blue bond is partially guaranteed by a USD 5 million guarantee from the World Bank (IBRD) and is further supported by a USD 5 million concessional loan from the Global Environment Facility (GEF) which will partially cover interest payments for the bond. Proceeds from the bond will be utilised for the expansion of marine protected areas, improved governance of priority fisheries and the development of the Seychelles’ blue economy. Proceeds from the bond will also contribute to the World Bank’s South West Indian Ocean Fisheries Governance and Shared Growth Program, which supports countries in the region to sustainably manage their fisheries and increase economic benefits from their fisheries sectors. Grants will be provided through the Blue Grants Fund and will be managed by the Seychelles’ Conservation and Climate Adaptation Trust (SeyCCAT). Loans will be provided through the Blue Investment Fund and will be managed by the Development Bank of Seychelles (DBS). The Seychelles is an archipelagic nation consisting of 115 granite and coral islands in the Indian Ocean, off East Africa. As one of the world’s biodiversity hotspots, Seychelles is balancing the need to develop economically and protect its natural resources. After tourism, the fisheries sector is the most important industry in the country, contributing significantly to annual GDP and employing 17 percent of the population. Fish products make up around 95% of the total value of domestic exports.
Support Initiatives for MSME Sector
The government has launched a historic support and outreach programme for the Micro, Small and Medium Enterprises (MSME) sector. As part of this programme, the Prime Minister of India recently unveiled 12 key initiatives which will help the growth, expansion and facilitation of MSMEs across the country.
Significance: There are five key aspects for facilitating the MSME sector. These include access to credit, access to market, technology upgradation, ease of doing business, and a sense of security for employees. The 12 initiatives will address each of these five categories.
The 12 initiatives include:
59 minute loan portal to enable easy access to credit for MSMEs. Loans upto Rs. 1 crore can be granted in-principle approval through this portal, in just 59 minutes.
A 2% interest subvention for all GST registered MSMEs, on fresh or incremental loans. For exporters who receive loans in the pre-shipment and post-shipment period, there will be an increase in interest rebate from 3% to 5%. All companies with a turnover more than Rs. 500 crore, must now compulsorily be brought on the Trade Receivables e-Discounting System (TReDS). Joining this portal will enable entrepreneurs to access credit from banks, based on their upcoming receivables. This will resolve their problems of cash cycle.
Public sector companies have now been asked to compulsorily procure 25%, instead of 20% of their total purchases, from MSMEs.
Out of the 25% procurement mandated from MSMEs, 3% must now be reserved for women entrepreneurs.
All public sector undertakings of the Union Government must now compulsorily be a part of GeM. He said they should also get all their vendors registered on GeM.
20 hubs will be formed across the country, and 100 spokes in the form of tool rooms will be established.
Clusters will be formed of pharma MSMEs. 70% cost of establishing these clusters will be borne by the Union Government.
The return under 8 labour laws and 10 Union regulations must now be filed only once a year.
Now the establishments to be visited by an Inspector will be decided through a computerised random allotment.
Under air pollution and water pollution laws, now both these have been merged as a single consent. The return will be accepted through self-certification.
An Ordinance has been brought, under which, for minor violations under the Companies Act, the entrepreneur will no longer have to approach the Courts, but can correct them through simple procedures.
Significance of MSMEs: Micro-, Small and Medium-sized Enterprises are the backbone of most economies worldwide and play a key role in developing countries. According to the data provided by the International Council for Small Business (ICSB), formal and informal Micro-, Small and Medium-sized Enterprises (MSMEs) make up over 90% of all firms and account on average for 60-70% of total employment and 50% of GDP. These types of enterprises are responsible for significant employment and income generation opportunities across the world and have been identified as a major driver of poverty alleviation and development. MSMEs tend to employ a larger share of the vulnerable sectors of the workforce, such as women, youth, and people from poorer households. MSMEs can even sometimes be the only source of employment in rural areas. As such, MSMEs as a group are the main income provider for the income distribution at the “base of the pyramid”.
Partial credit enhancement (PCE)
The Reserve Bank of India (RBI) has allowed banks to provide partial credit enhancement (PCE) to bonds issued by systemically important non-deposit taking non-banking financial companies (NBFCs) registered with the RBI and housing finance companies (HFCs) registered with the National Housing Bank. The move is aimed at enhancing the credit rating of the bonds and enabling these NBFCs to access funds from the bond market on better terms. PCE is expected to help NBFCs and HFCs raise money from insurance and provident or pension funds who invest only in highly-rated instruments.
The tenure of these bonds shall not be less than three years and proceeds from them shall only be utilized to refinance existing debt.
Banks shall introduce appropriate mechanisms to monitor and ensure that the end-use condition is met. The central bank has restricted the exposure of a bank through PCEs to bonds issued by each such NBFC or HFC to 1% of capital funds of the bank within the current single and group borrower exposure limits. Banks are allowed to provide PCE as non-funded subordinated facility in the form of a contingent line of credit to be used in case of shortfall in cash flows for servicing the bonds and thereby improve the credit rating of the bond issue. The incentive comes at a time when NBFCs and HFCs have requested the government and regulators to ensure that confidence returns to the market. They have sought relaxations of the National Housing Bank’s credit rating norms related to refinance, lowering of the criterion on years of existence to one year, providing for 10% of the loan loss by the government and capital infusion in banks.
What is credit enhancement?
Credit enhancement means improving the credit rating of a corporate bond. For example, if a bond is rated BBB, credit enhancement, which is basically an assurance of repayment by another entity, can improve the rating to AA. This is done to provide an additional source of assurance or guarantee to service the bond. RBI has now allowed banks to provide credit enhancement up to 20% of the total bond issue. This means banks (one or many together) can assure repayment of dues related to a bond issue up to 20% of the value. Other than banks, organisations such as India Infrastructure Finance Co. Ltd also provide this facility.
BENEFITS FOR THE ISSUER: Typically, bonds issued by subsidiaries or special purpose vehicles (SPVs) of infrastructure companies seek enhancement. Since the projects take a long time to become operational and generate money, along with the risk of implementation, often their formal credit rating is not very high. Through the credit enhancement facility, the existing rating can be improved at an early stage, which enables the issuer to raise funds at a relatively lower yield. Higher the credit rating, lower is the cost of raising funds. Since these bonds are long-term in nature, they appeal to institutional investors like pension funds and insurers. However, these investors, especially pension funds, invest mostly in investment grade securities which are at least AA-rated. Credit enhancement makes the bonds more attractive by improving the rating enough so that institutional investors become interested in adding these to their portfolios.
BENEFIT FOR THE INVESTOR: For the investor, the facility provides a sort of insurance in case of hard times. Basically, the credit enhancement gets used only when there is a shortfall in either paying interest or repaying principal. Hence, investors are more secure about repayment even if there is uncertainty regarding cash flows for some time.
BENEFITS FOR THE BOND MARKET: The bond market will benefit as more issues get placed, which will help in developing the secondary market. This is useful in giving investors an early exit route, and in adding stability to secondary market transactions in long-term corporate bonds. At present, however, there is not much trading happening in long-term corporate bonds from infrastructure companies in the secondary market.
Society for worldwide interbank financial telecommunication
The Head of the US Treasury Steven Mnuchin has announced that Washington wants the world-wide payment network to cut off its services to the entities that were affected by Iran sanctions and warned that otherwise SWIFT might be sanctioned as well. The US will reintroduce sanctions against Tehran that were earlier lifted under the Iran nuclear deal, on November 5. These sanctions will affect the country’s energy, banking, and shipping sectors.
What is SWIFT? The SWIFT is a global member-owned cooperative that is headquartered in Brussels, Belgium. It was founded in 1973 by a group of 239 banks from 15 countries which formed a co-operative utility to develop a secure electronic messaging service and common standards to facilitate cross-border payments. It carries an average of approximately 26 million financial messages each day. In order to use its messaging services, customers need to connect to the SWIFT environment.
Functions: SWIFT does not facilitate funds transfer: rather, it sends payment orders, which must be settled by correspondent accounts that the institutions have with each other. The SWIFT is a secure financial message carrier — in other words, it transports messages from one bank to its intended bank recipient. Its core role is to provide a secure transmission channel so that Bank A knows that its message to Bank B goes to Bank B and no one else. Bank B, in turn, knows that Bank A, and no one other than Bank A, sent, read or altered the message en route. Banks, of course, need to have checks in place before actually sending messages. Messages sent by SWIFT’s customers are authenticated using its specialised security and identification technology. Encryption is added as the messages leave the customer environment and enter the SWIFT Environment. Messages remain in the protected SWIFT environment, subject to all its confidentiality and integrity commitments, throughout the transmission process while they are transmitted to the operating centres (OPCs) where they are processed — until they are safely delivered to the receiver.
Growth of eight infrastructure sectors at 4.3% in September 2018
As per data released by Union Ministry of Commerce and Industry, index of eight core industries slowed down to 4.3% in September 2018. It is lowest growth recorded by core sectors in the last four months, as production of crude oil and natural gas declined by 4.2% and 1.8%, respectively. Previously, lowest growth rate was in May 2018 when core sectors expanded at 4.1%. In September 2018, Fertiliser, cement and electricity sectors output grew by 2.5%, 11.8% and 8.2%, respectively. However, growth of coal, refinery products, and steel sectors declined to 6.4%, 2.5% and 3.2%, respectively.
Core industries: Core industries are main or key industries of the economy. In most countries, these particular industries serve as backbone of all other industries. In India, there are eight core sectors comprising of coal, crude oil, natural gas, petroleum refinery products, fertilisers, steel, cement and electricity. The eight infrastructure sectors, constitute 40.27% of the total index of industrial production (IIP).
Revised weightage in core sectors: Petroleum Refinery production (weight: 28.04%), Electricity generation (19.85%), Steel production (17.92%), Coal production (10.33%), Crude Oil production (8.98%), Natural Gas production (6.88%), Cement production (5.37%), Fertilizers production (2.63%).
Index of Industrial Production (IIP) – 2011-12 series
The all India index of Industrial Production (IIP) is a composite indicator that measures the short-term changes in the volume of production of a basket of industrial products during a given period with respect to that in a chosen base period. It is compiled and published monthly by the Central Statistical Organization (CSO), Ministry of Statistics and Programme Implementation six weeks after the reference month ends.
Sectoral Composition of the IIP
Sector Base Year 2011-12 Base Year 2014-05
Weight (%) Item Groups Weight (%) Item Groups
Mining 14.373 1 14.157 1
Manufacturing 77.633 405 75.527 397
Electricity 7.994 1 10.316 1
Total 100 407 100 399
Public Credit Registry (PCR)
The Reserve Bank has initiated steps to set up a wide-based digital Public Credit Registry (PCR) to capture details of all borrowers, including wilful defaulters and also the pending legal suits in order to check financial delinquencies. The PCR will also include data from entities like market regulator SEBI, the Corporate Affairs Ministry and the Insolvency and Bankruptcy Board of India to enable banks and financial institutions to get a 360-degree profile of existing and prospective borrowers on a real-time basis.
Public Credit Registry:
What is it? The PCR will be an extensive database of credit information for India that is accessible to all stakeholders. The idea is to capture all relevant information in one large database on the borrower and, in particular, the borrower’s entire set of borrowing contracts and outcomes.
Management of PCR: Generally, a PCR is managed by a public authority like the central bank or the banking supervisor, and reporting of loan details to the PCR by lenders and/or borrowers is mandated by law. The contractual terms and outcomes covered and the threshold above which the contracts are to be reported vary in different jurisdictions, but the idea is to capture all relevant information in one large database on the borrower, in particular, the borrower’s entire set of borrowing contracts and outcomes.
Need for a PCR: A central repository, which, for instance, captures and certifies the details of collaterals, can enable the writing of contracts that prevent over-pledging of collateral by a borrower. In absence of the repository, the lender may not trust its first right on the collateral and either charge a high cost on the loan or ask for more collateral than necessary to prevent being diluted by other lenders. This leads to, what in economics is termed as, pecuniary externality – in this case, a spillover of one loan contract onto outcomes and terms of other loan contracts. Furthermore, absent a public credit registry, the ‘good’ borrowers are disadvantaged in not being able to distinguish themselves from the rest in opaque credit markets; they could potentially be subjected to a rent being extracted from their existing lenders who enjoy an information monopoly over them. The lenders may also end up picking up fresh clients who have a history of delinquency that is unknown to all lenders and this way face greater overall credit risk.
Benefits of having a PCR: A PCR can potentially help banks in credit assessment and pricing of credit as well as in making risk-based, dynamic and counter-cyclical provisioning. The PCR can also help the RBI in understanding if transmission of monetary policy is working, and if not, where are the bottlenecks. Further, it can help supervisors, regulators and banks in early intervention and effective restructuring of stressed bank credits. A PCR will also help banks and regulators as credit information is a ‘public good’ and its utility is to the credit market at large and to society in general.
Task force on PCR: The Reserve Bank of India (RBI) had formed a high-level task force on public credit registry (PCR) for India. The task force was chaired by Y M Deosthalee. The task force has suggested the registry should capture all loan information and borrowers be able to access their own history. Data is to be made available to stakeholders such as banks, on a need-to-know basis. Data privacy will be protected.
Water ATMs may help in bridging safe water gap
The government is increasingly starting to accept small water enterprises such as water ATMs and community purification plants as an alternative solution to the safe drinking water challenge. In 2010, the United Nations declared access to clean drinking water as a human right, however with 82 crore people who still do not have access to piped water and 70% of water in the country contaminated by pollutants. In 2010, the United Nations declared access to clean drinking water as a human right. Community water purification plants have grown from less than 12,000 in 2014 to almost 50,000 in 2018, according to the SWN, as they have been incorporated into government planning. To reach the government’s Har Ghar Jal target of 100% piped water by 2030, almost ₹5 lakh crore of infrastructure investment will be required, says government data. SWN estimates that if the government is willing to spend less than 10% of that amount on small water enterprises, it could provide safe drinking water at a fraction of the cost.
Findings of Indices: A recent report by the Comptroller and Auditor General of India (CAG) pointed out that only 18% of the rural population has access to potable piped water, failing to meet the 2017 target of 50%. India is ranked at 120 out of 122 countries on the Water Quality Index, said Niti Aayog, adding that 70% of the country’s water supply is contaminated. A 2017 report by WaterAid India, titled “Wild Water: The State of the World’s Water”, stated that around 63 million of India’s 833 million rural population has no access to clean drinking water. A new report by Safe Water Network (SWN) says the government needs to spend ₹44,000 crore on 2.2 lakh small water enterprises to provide safe drinking water to about 37 crore people, mostly in urban slums where piped water infrastructure is difficult to build, and in rural areas with contaminated water sources.
Water ATMs: A water ATM is like a vending machine that provides clean drinking water 24 hours a day. The water ATM can be automatic with a coin or smart card, or manual essentially, it’s a community RO. It is powered by solar energy, integrated with reverse osmosis (RO) and ultrafiltration units with reduced operational costs.
Competition Commission of India
A ‘National Conference on Public Procurement & Competition Law’ is being organised by the Competition Commission of India (CCI) with a view to scale up Competition Advocacy and reach out to important stakeholders in public procurement ecosystem. The National Conference is being organised in association with Indian Institute of Corporate Affairs (IICA), a think tank under the aegis of Ministry of Corporate Affairs.
Competition Commission Of India: The Competition Commission of India (CCI) was established under the Competition Act, 2002 for the administration, implementation and enforcement of the Act, and was duly constituted in March 2009. Chairman and members are appointed by the central government.
The following are the objectives of the Commission: To prevent practices having adverse effect on competition. To promote and sustain competition in markets. To protect the interests of consumers. To ensure freedom of trade.
Functions of the commission: It is the duty of the Commission to eliminate practices having adverse effect on competition, promote and sustain competition, protect the interests of consumers and ensure freedom of trade in the markets of India. The Commission is also required to give opinion on competition issues on a reference received from a statutory authority established under any law and to undertake competition advocacy, create public awareness and impart training on competition issues.
The Competition Act: The Competition Act, 2002, as amended by the Competition (Amendment) Act, 2007, prohibits anti-competitive agreements, abuse of dominant position by enterprises and regulates combinations (acquisition, acquiring of control and M&A), which causes or likely to cause an appreciable adverse effect on competition within India.
Committee to review the Act: In pursuance of its objective of ensuring that Legislation is in sync with the needs of strong economic fundamentals, the Government recently constituted a Competition Law Review Committee to review the Competition Act headed by Secretary, Ministry of Corporate Affairs.
Central Board of the RBI
Why has the RBI Board been in the news?
The RBI Board recently entered the news during the public spat between the central bank and the Finance Ministry. One of the reasons for the disagreement was the government’s alleged threat of invoking Section 7 of the RBI Act.
Section 7 basically empowers the government to supersede the RBI Board and issue directions to the central bank if they are considered to be “necessary in public interest”.
What is the RBI Board?
The RBI Board is a body comprising officials from the central bank and the Government of India, including officials nominated by the government. According to the RBI, the “general superintendence and direction of the affairs and business of the RBI is entrusted to the Central Board” and the Board exercises all powers and does all acts and things that are exercised by the RBI. The Board is also to recommend to the government the design, form and material of bank notes and also when and where they can serve as legal tender.
Who sits on the Board?
The Board consists of official directors, who include the Governor and up to four Deputy Governors, non-official directors, who include up to ten directors from various fields and two government officials, and one director from each of four local boards of the RBI.
The Governor and Deputy Governors hold office for not more than five years, the ten directors nominated by the government hold office for four years, and the government officials are to hold a term on the RBI Board as long as the government sees fit. According to the RBI Act, the director of the RBI Board cannot be a salaried government official (except for the ones specifically nominated by the government), be adjudicated as insolvent or have suspended payments to creditors, an officer or employee of any bank (again, this does not include the government nominee), or, interestingly, “is found lunatic or becomes of unsound mind”.
When does the Board meet?
The Governor has to call a Board meeting at least six times in a year, and at least once each quarter. A meeting can be called if a minimum of four Directors ask the Governor to call a meeting. The Governor or, if for any reason unable to attend, the Deputy Governor authorised by the him to vote for him, presides the Board meetings. In the event of split votes, the Governor has a second, or deciding vote.
Terms of disclosure
The article discusses India’s performance in RTI ratings. The Global RTI Rating has been developed by Access Info Europe (AIE)and the Centre for Law and Democracy (CLD). It provides a numerical assessment for the overall legal framework for the right to information (RTI) in a country, based on how well that framework gives effect to the right to access information held by public authorities. The Ratings are based on 61 indicators which are divided into seven different categories, namely: Right of Access, Scope, Requesting Procedures, Exceptions and Refusals, Appeals, Sanctions and Protections, and Promotional Measures. It examines countries using a 150-point scale to indicate their strengths and weaknesses. The RTI Rating is limited to measuring the legal framework and does not measure the quality of implementation.
Highlights of RTI Rating 2018
Afghanistan topped the list scoring 139 out of 150 points followed by Mexico (136), Serbia (135), Sri Lanka (131) and Slovenia (129). Austria was placed at the bottom scoring just 33 points. India secured 6th rank out of 123 countries. India has slipped from its second position (2011) to fourth, fifth and sixth in 2016, 2017 and 2018 respectively.
India scored 128 out of a possible total of 150 points. India performed worst under the section “Sanctions and Protections”, scoring just above 60 percent points. Further, India failed to match up to the expectations in five of the sections including scope of the RTI Act, requesting procedures, exceptions and refusals and measures taken to promote the Act, and has scored just above 80 percent points. The report states that one of the biggest issue faced by India’s RTI Act is the fact that it offers no protection to officials (from sanctions) who “release information that shows wrongdoing”, thus keeping them open to punitive actions for upholding the Act. Another major problem with RTI Act is blanket exceptions in Schedule 2 for various security, intelligence, research and economic institutes. The report advocates that instead of such broad exclusions, these interests should be protected by individual and harm-tested exception
Government interference in Reserve Bank Of India (RBI)
Recent public spat between RBI and central government over interference of later in policy formulation of RBI has drawn criticism. The recent impasse between RBI and the government arises from a recent ill-timed and ill-advised speech by RBI deputy governor Viral Acharya. The speech followed some unnecessarily tough posturing from the government, threatening to invoke the dreaded Section 7 of the RBI Act.
CONTRADICTING VIEWS OF RBI AND GOVERNMENT
Demonetisation: RBI had to take blame for demonetization chaos which caused many deaths, problems of law and order and delay in proper rolling out of newly printed currency due to mismanagement. CVC report in Nirav Modi case had blamed RBI for poor auditing. CVC had already warned about the misuse of Letter Of undertaking (LoU) which was ignored by central bank.
Opposition of “ Project Shashakt”
RBI had opposed Project Shashakt which was forcibly implemented by central government later.
Project Shashakt: Project Shashakt aims to resolve the problem of stressed assets of public sector banks through resolution of bad loans, depending on their size. It includes an SME approach, a bank-led resolution approach, an asset management company (AMC)/ alternate investment fund (AIF)-led approach, an NCLT / IBC-led approach and an asset trading platform approach. India’s Public Sector Undertaking (PSU) banks make up 70 per cent of the total bad loans of banking industry.
Opposition to setup payment regulator outside RBI
RBI had opposed government’s bid to setup an independent payment regulator outside RBI. The Payment and Settlement System (PSS) Act had recommended that the payments regulator should be an independent regulator with the chairperson appointed by the government in consultation with the RBI. This had been opposed by the central bank, which wants the chairperson to be from the central bank with a casting vote. The government had sought the governor’s views on using RBI’s capital reserves for providing liquidity. This was declined by the governor. Government wanted RBI to withdraw Prompt Corrective Action for public sector banks for easing constraints on banks for loans to small and medium enterprises (SMEs). IMF has also suggested the same for revival of banking sector.
Provisions of Government’s interference in RBI’s governance:
According to the RBI Act’s Section 7 (1), “the central government may from time to time give such directions to the Bank as it may, after consultation with the Governor of the Bank, consider necessary in the public interest”. The Allahabad high court, in a judgment in August, said the government could issue directions to RBI under Section 7 of RBI Act. However, the government has only initiated consultations with RBI on different issues under Section 7 (1) and not invoked it.
Has Government really crossed its executive powers in this case?
First instance: During the hearing of a case filed by the Independent Power Producers Association of India in Allahabad high court challenging RBI’s circular regarding exemption to power companies in certain cases, court said that government could issue directions to RBI under Section 7 of RBI Act. Hence, government was only following guidelines by the court.
Second instance: The government sought the governor’s views on using RBI’s capital reserves for providing liquidity.
Third instance: It pertained to regulatory issues, which includes withdrawal of Prompt Corrective Action for public sector banks, thus easing constraints on banks for loans to small and medium enterprises (SMEs).
In all the above cases the government has only initiated consultation process with RBI on different issues under Section 7 (1) and not invoked it. Hence, it can be said that government has only used its power under RBI act to advise the central bank.
What are Micro, Small and Medium Enterprises?
According to Micro, Small and Medium Enterprises Development (MSMED) Act, 2006, there are two categories of MSMEs in the country – manufacturing and services. For the manufacturing sector, the definition of an MSME is based on a company’s capital investment in plant and machinery. For the services sector, the definition of an MSME is based on a company’s investments in equipment.
The Micro, Small and Medium Enterprises Development (MSMED) Act, 2006:
It governs the coverage and investment ceiling of MSMEs in India. In February 2018, Union cabinet approved amendment to Section 7 of the Micro, Small and Medium Enterprises Development (MSMED) Act, 2006 for classifying MSMEs from current investment in plant and machinery criteria to annual turnover criteria.
A micro enterprise will be defined as a unit where the annual turnover does not exceed five crore rupees; A small enterprise will be defined as a unit where the annual turnover is more than five crore rupees but does not exceed Rs 75 crore; A medium enterprise will be defined as a unit where the annual turnover is more than 75 crore rupees but does not exceed Rs 250 crore. Additionally, the Central Government may, by notification, vary turnover limits, which shall not exceed thrice the limits specified in Section 7 of the MSMED Act.
Organizational structure: The primary responsibility of promotion and development of MSMEs is of the State Governments. The role of the Ministry of MSME and its organisations is to assist the States in their efforts to encourage entrepreneurship, employment and livelihood opportunities and enhance the competitiveness of MSMEs The Ministry of MSME consists of Small & Medium Enterprises (SME) Division, Agro & Rural Industry (ARI) Division, Integrated Finance (IF) Wing and Data Analytics and Technical Coordination (DATC) Wing, the Office of the Development Commissioner (DCMSME) and other attached organizations
Credit Guarantee Trust Fund for Micro & Small Enterprises (CGTMSE): Ministry of MSME and Small Industries Development Bank of India (SIDBI), established a Trust named Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) to implement Credit Guarantee Fund Scheme for Micro and Small Enterprises and provide financial assistance to MSMEs. The corpus of CGTMSE is being contributed by GoI and SIDBI
A Scheme for Promoting Innovation, Rural Industry & Entrepreneurship (ASPIRE): It aims to set up a network of technology centers, incubation centres to accelerate entrepreneurship and also to promote start-ups for innovation and entrepreneurship in rural and agriculture based industry
Micro & Small Enterprises Cluster Development (MSE-CDP): It aims to support the sustainability and growth of MSEs by addressing common issues such as improvement of technology, skills and quality, market access, access to capital, etc.
National Manufacturing Competitiveness Programme: The objective is to develop global competitiveness among Indian MSMEs. This programme targets at enhancing the entire value chain of the MSME sector.
SFURTI-SI (Scheme of Fund for Regeneration of Traditional Industries, Credit Guarantee Scheme): The scheme aims to organize the traditional industries and artisans into clusters to make them competitive and provide support for their long term sustainability and economy of scale
Technology Centre Systems Programme (TCSP): Under this programme, technology centres have been developed for giving technical education and support to MSMEs
MUDRA (Micro Units Development & Refinance Agency Ltd.): The establishment of the MUDRA (Micro Units Development & Refinance Agency Ltd.) bank under the Pradhan Mantri MUDRA Yojana has been a major initiative. The Bank gives loans for working capital and additional requirements to income generating small business activity in manufacturing, processing, services or trading.
Credit Linked Capital Subsidy Scheme (CLCSS): CLCSS aims at facilitating technology upgradation of Micro and Small Enterprises (MSEs) by providing 15% capital subsidy (limited to maximum Rs.15 lakhs) for purchase of Plant & Machinery.
Prime Minister’s Employment Generation Programme (PMEGP): The major objective is to generate employment opportunities in rural as well as urban areas of the country through setting up of new self- employment ventures/ projects/ micro enterprises.
Udyog Aadhaar Memorandum (UAM): It is a simple one-page registration form aimed at easing out registration process.
MSME SAMADHAAN:The Ministry of MSME launched a portal samadhaan.msme.gov.in. to facilitates MSEs to file their delayed payments related complaints online.
Market assistance Scheme: It aims to help MSMEs to participate domestic and international exhibitions/trade fairs etc.
Support and Outreach Initiative for MSME Sector:
59-minute loan portal (loans up to 1 crore) to enable easy access to credit for MSMEs.
2% interest subvention for all GST registered MSMEs, on fresh or incremental loans.
increase in interest rebate from 3% to 5%, for exporters who receive loans in the pre-shipment and post-shipment period
All companies with a turnover more than Rs. 500 crore, must now compulsorily be brought on the Trade Receivables e-Discounting System (TReDS). Joining this portal will enable entrepreneurs to access credit from banks, based on their upcoming receivables.
public sector companies have been asked to compulsorily procure 25%, instead of 20% of their total purchases, from MSMEs. Out 25% procurement mandated from MSMEs, 3% must now be reserved for women entrepreneurs.
Technology upgradation: 20 hubs to be formed across the country, and 100 spokes in the form of tool rooms to be established.