Centre announces Rs 20\,000 crore for stressed MSMEs\, hikes MSP for kharif crops

Centre announces Rs 20,000 crore for stressed MSMEs, hikes MSP for kharif crops

This is the first meeting of the Cabinet after the ruling NDA government completed the first year of its second term in office.

By: Express Web Desk | New Delhi | Updated: June 1, 2020 5:01:46 pm
Visuals from Prime Minister Narendra Modi’s Union Cabinet meeting today. (PIB/Twitter)

In a bid to boost the fledgling MSMEs, which has been hit the hardest due to the Covid-19 lockdown, the Union Cabinet on Monday approved an infusion of Rs 20,000 crore into the sector besides announcing a slew of measures to help alleviate the distress in the farm sector.

Addressing a media briefing, Union Minister Nitin Gadkari said the Cabinet had approved modalities and road map for implementing two packages for MSMEs. “This includes a Rs 20,000 crore package for distressed MSMEs, which will benefit 2 lakh stressed MSMEs and Rs 50,000 crore equity infusion through Fund of Funds,” Gadkari said.

This comes on the back of collateral-free loans for MSMEs worth Rs 3 lakh crore that was announced by Finance Minister Nirmala Sitharaman as part of the Atmanirbhar Bharat Abhiyan economic package.

The turnover limit for medium enterprises has been further amended to Rs 250 crore and investment limit has been raised to Rs 50 crore.

In a move that will help farmers, the Centre increased minimum support prices (MSP) for 14 kharif crops by 50-83 per cent. The government also hiked MSP for paddy by Rs 53 per quintal to Rs 1,868 per quintal for the 2020-21 crop year while the MSP for cotton has been increased by Rs 260 to Rs 5,515 per quintal.

“The farmers will get more time to repay their loans, till August now,” Union Minister Narendra Tomar said at the media briefing of Cabinet decisions.

The announcement comes hours after Prime Minister Narendra Modi chaired a meeting of the Union Cabinet on Monday as the nation entered the ‘Unlock 1‘ phase following a two-month strict coronavirus lockdown. This was the first meeting of the Cabinet after the ruling NDA government completed the first year of its second term in office.

The meeting comes on the backdrop of the GDP growth slowing to 3.1 per cent in the January-March quarter and the border standoff with China. PM Modi had last chaired a cabinet meeting on March 25 at his Lok Kalyan Marg residence.

There were 8,392 new cases of the coronavirus disease (Covid-19) and 230 deaths in the last 24 hours pushing India’s tally to 190,535 on Monday.