Business Today
Loading...

Andhra Pradesh announces Rs 1,110 crore ReSTART package for MSMEs

While the move is aimed at reviving the MSME sector, it will also protect existing jobs and create new ones. In Andhra Pradesh, around 1 lakh MSMEs provide employment to more than 10 lakh workers

twitter-logo BusinessToday.In        Last Updated: May 22, 2020  | 01:34 IST
Andhra Pradesh announces Rs 1,110 crore ReSTART package for MSMEs

KEY HIGHLIGHTS

  • Andhra Pradesh announces stimulus for MSMEs, promises to release Rs 905 crore of pending incentives in 2 months
  • ReSTART package includes waiver of fixed demand charges towards power for a period of 3 months
  • A Rs 200 crore Fund of Funds on anvil to provide working capital to MSMEs
  • Preferential Market Access Policy to ensure that 25% government purchases are from MSMEs

To help micro, small and medium enterprises (MSMEs) tide over the coronavirus-induced economic crisis, Andhra Pradesh government on Thursday announced a stimulus package ReSTART for such firms operating in the state.

The Rs 1,110 crore relief package for the MSME sector includes release of Rs 905 crore outstanding incentives, waiver of fixed electricity charges, and soft loans to meet working capital needs.

"The ReSTART package includes the payment of all sanctioned but outstanding incentives to MSME units, waiver of 3 months fixed demand charges for MSMEs, deferment of minimum power demand charges for 3 months for large and mega units, working capital loans for MSEs along with preferential market access for MSMEs," an official statement from Andhra Pradesh Economic Development Board (APEDB) said.

A preferential market access policy has also been announced which will ensure that 25 per cent of government purchases are from MSME firms for about 364 items.

ALSO READ: Relief for MSMEs! Govt amends rules to ban global tender for procurement up to Rs 200 crore

ALSO READ: Need to keep govt revenue in mind, says FM Sitharaman on tax cuts

"The markets for most of the Micro and Small Enterprises (MSEs) have been eroded due to the loss of global supply chains and providing market access is a key intervention. So a Preferential Market Access to MSEs in all government procurements is provided," the official statement said.

While the move is aimed at reviving the MSME sector, it will also protect existing jobs and create new ones. In Andhra Pradesh, around 1 lakh MSMEs provide employment to more than 10 lakh workers.

At the national level too, over 6 crore MSMEs play a major role in job creation and are considered the second biggest employer after agricultural sector. It employs nearly 12 crore workers across various sectors.

"MSMEs are the lifeblood of our economy as they contribute in a significant way to the growth with a share of around 45 per cent in total manufacturing output and 40 per cent of exports. Importantly, MSMEs generate 10 times as many jobs created for a given unit of investment compared to large and mega industries," APEDB noted.

The move has come days after Centre announced a relief package including Rs 3 lakh crore collateral-free loans for the MSME sector. As part of its mega Rs 20 lakh crore stimulus package, Finance Minister Nirmala Sitharaman also announced to widen the definition of MSMEs to ensure they grow in size and scale.

The MSME sector has, however, remained unimpressed by the package and maintained that it needs immediate cash support to pay wages and salaries.

ALSO READ: Coronavirus impact: MSMEs demand loan moratorium till March 2021

ALSO READ: Govt will make sure banks lend money to smaller businesses: Sitharaman

Youtube
  • Print

  • COMMENT
BT-Story-Page-B.gif
A    A   A
close