Credit guarantee scheme for MSMEs through infusion of Rs 9,000 Cr

The revamped credit guarantee scheme for MSMEs will be effective from April 1, through an infusion of Rs 9,000 crore, said the Finance Minister, Nirmala Sitharaman. This will enable additional collateral-free loans of Rs 2 lakh, with the cost of credit to be reduced by 1%, she said.

“To support MSMEs in timely receipt of payments, I propose to allow deduction for expenditure incurred on payments made to them only when payment is actually made,” she said.

With respect to taxation benefits, the finance minister announced that micro enterprises with a turnover of Rs 2 crore and certain professionals with a turnover of Rs 50 lakh could avail themselves of the benefit of presumptive taxation. She proposed enhanced limits of Rs 3 crore and Rs 75 lakh, respectively, to taxpayers whose cash receipts are no more than 5%.  

The finance minister announced a package to assist traditional artisans and craftsmen through the PM VIKAS (Vishwakarma Kaushal Samman) scheme. It is the first time a scheme has been conceptualised for them, according to the minister. Traditional artisans and craftspeople who work with their hands represent the true spirit of Aatmanirbhar Bharat, she said.

A refund scheme for failed MSMEs was also announced under Vivad se Vishwas; 95% of the forfeited amount will be returned to them by the government and government undertakings. 

(The copy was updated to correct details on the Vivad se Vishwas scheme.)