Redefining MSME Champions

• The Government of India has been actively fighting the threat of COVID-19 to protect its citizens and businesses, especially Micro, Small and Medium Enterprises (MSMEs). It is the government’s priority to provide them support and realize the larger goal of self-reliant India or Atmanirbhar Bharat.
• To give a boost to Make in India and support MSMEs - the backbone of the Indian economy, the Government of India has launched several measures which include:
  • A new definition and classification criteria for MSMEs ¹
  • Launch of the online portal, CHAMPIONS ²
  • Financial aid with the introduction of new schemes under comprehensive economic package ³

Sources: 1, 2, 3

• The Ministry of Micro, Small and Medium Enterprises (M/o MSMEs) has updated the existing criterion of the definition of MSMEs which was based on the Micro, Small and Medium Enterprise Development (MSMED) Act, 2006. ¹
• “Turnover” is now included as a new measure to segregate MSMEs along with the previously existing criterion of “Investment”. According to the new definition, there will be no difference between manufacturing and services, the same limits will apply to both sectors. ¹
• Following are the new limits for classifying MSMEs based on Investment and Turnover: ²
  • Micro Enterprise:
    • Investment – Up to INR 1 Crore 
    • Turnover – Up to INR 5 Crore
  • Small Enterprise:
    • Investment – Up to INR 10 Crore 
    • Turnover – Up to INR 50 Crore
  • Medium Enterprise:
    • Investment – Up to INR 50 Crore 
    • Turnover – Up to INR 250 Crore

Sources: 1, 2

• On 1^st June 2020, Hon’ble PM Narendra Modi launched the technology platform CHAMPIONS. It stands for Creation and Harmonious Application of Modern Processes for Increasing the Output and National Strength. ¹
• The ICT (Information and Communication Technology) based portal is enabled by Artificial Intelligence, Data Analytics and Machine Learning. It is designed to support MSMEs and act as a one-stop-shop solution for the Ministry of MSMEs. ¹
• Following are the broad objectives of CHAMPIONS: ¹
  • Grievance redressal
  • Helping MSMEs secure new opportunities
  • Identify and encourage potential MSMEs

Sources: 1

• The government announced INR 3 Lakh Crore collateral-free and guarantee free loans to MSMEs to help them overcome the disruption caused due to COVID-19. All eligible businesses and MSMEs can apply for loans under the scheme through Banks, Department of Financial Services, and National Credit Guarantee Trustee Company Ltd (NCGTC). ¹
• Through the Distressed Assets Fund–Sub Debit Scheme, the government will provide a debt facility to the promoters of distressed MSMEs. This assistance will be up to 15% of the promoter contribution of INR 75 lakhs. Any Functioning MSME which is NPA or distressed may approach scheduled commercial banks to avail benefits under the scheme. ¹

Sources: 1