Govt Decisions to Have Transformative Impact on MSMEs, Farmers: PM

The Cabinet meeting by PM Modi came on a day when the fifth phase of the lockdown came into effect.

Updated
India
2 min read
 Prime Minister Narendra Modi chairs a cabinet meeting on 1 June.
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With the Centre on Monday, 1 June, announcing a string of measures for the MSME (Micro, Small and Medium Enterprises) sector as well as the agriculture sector, Prime Minister Narendra Modi took to Twitter to say that the decisions by the Cabinet will have a "transformative impact on the MSME sector, our hardworking farmers and street vendors."

"MSME sector is of great importance for us. Decisions taken for the MSME sector in today’s Cabinet meet will draw investments, ensure ‘Ease of Doing Business’, and easier availability of capital. Many entrepreneurs will gain from the revised definition of MSMEs," Modi tweeted.

On the announcements made for farmers, the PM said the "government has fulfilled its promise to our hardworking farmers, of fixing the MSP at a level of at least 1.5 times of the cost of production" and that "care has been taken towards improving the financial situation of our farmers."

Relief for MSMEs

With the coronavirus lockdown dealing a severe blow to the economy, Union Ministers Prakash Javadekar, Narendra Singh Tomar and Nitin Gadkari on Monday announced a string of measures for the MSME sector as well as the agriculture sector. Hours earlier, PM Modi had also chaired a Cabinet meeting.

"The decisions taken by the Cabinet today will benefit farmers, MSMEs, hawkers and vendors... The government has further changed the definition of MSMEs, from the changes announced in the Atmanirbhar package," Javadekar was quoted as saying at the briefing, adding that the Cabinet has approved Rs 20,000 crore subordinate debt for stressed MSMEs, which will benefit 2 lakh such enterprises.

The turnover limit for medium enterprises has also been further amended to Rs 250 crore, while the investment limit has been raised to Rs 50 crore, Javadekar announced.

Giving further details about the relief being extended to MSMEs, Gadkari said, “The Cabinet has approved modalities and a road map for implementing two packages for MSMEs. A Rs 20,000 crore package for distressed MSMEs and a Rs 50,000 crore equity infusion through Fund of Funds.”

Measures for Agriculture Sector

The Cabinet on Monday also approved MSP (minimum support price) for 14 kharif crops, with farmers to get 50-83 percent more than the cost, the I&B minister said during the briefing.

Agriculture Minister Narendra Singh Tomar said that the government has hiked the paddy MSP by Rs 53 per quintal to Rs 1,868 per quintal for the 2020-21 crop year. Meanwhile, the cotton MSP has been increased by Rs 260 to Rs 5,515 per quintal for 2020-21.

"The farmers will get more time to repay their loans, till August now," Tomar was quoted by ANI as saying.

The BJP-led government recently finished the first year of its second term, and the Cabinet meeting chaired by PM Modi on Monday was the first one since the beginning of the second year.

The announcements come on a day when the fifth phase of the lockdown came into effect on Monday. While significant relaxations will be implemented in a phased manner until 30 June, restrictions will continue in the containment zones. Dubbed as ‘Unlock 1’, this period is aimed at reviving economy activity in the country.

(With inputs from PTI and ANI.)

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