WELCOME to the CEP of WIRC CEP of

WELCOME to the CEP of WIRC

CEP of WIRC Day 1 – 22 th June, 2020 • Introduction to 3 days schedule • Objectives of Incentive Policies/Incentive Schemes • Overview of total schemes üInfrastructure and support facilities üIncentives Schemes Already Introduced Since Independence üOutreach initiative for MSME sector on November 2 nd, 2018 üAatmanirbhar Stimulus • Detail Discussion ü MSME – Definition üMSMED 2006 üRegistration üCredit and Financial Assistance (Total 5 Schemes – Detail Discussion)

CEP- Three days – Coverage • To enrich participants with practical aspects of implementation. 1. Basic objective and intention of each scheme 2. Who can apply 3. Where to apply 4. Amount of Incentive Scheme 5. Application Procedure 6. Nodal Agency 7. Start Date 8. End Date 9. Forms Available 10. Website Reference

Objectives of Policy Decisions and Incentive Schemes • Objectives 1. 2. 3. 4. 5. 6. Adequate flow of credit from financial institutions/banks; Support for technology up-gradation and modernization; Integrated infrastructural facilities; Modern testing facilities and quality certification; Access to modern management practices; Entrepreneurship development and skill up-gradation through appropriate training facilities

Objectives of Policy Decisions and Incentive Schemes 7. Support for product development, design intervention and packaging; 8. Welfare of artisans and workers; 9. Assistance for better access to domestic and export markets; and 10. Cluster-wise measures to promote capacity-building and empowerment of the units and their collectives.

A) Infrastructure and Facilities- Overview 1. 2. 3. 4. 5. 6. 7. 8. The organizational Structure (Three Tier) Vision and Mission Statement for Development of MSME Policy MSMED Act 2006 Udyog Adhar Memorandom (Simple Registration Processes) SAMADHAN Direct Benefit Transfer in the M/o MSME Sambandh ( 25% procurement from MSME)

B) Incentive schemes –Since Independence(Total 17) A) Credit and Financial Assistance 1. Micro Units Development and Refinance Agency Ltd. (MUDRA) 2. Prime Minister’s Employment Generation Programme (PMEGP) 3. Credit Linked Capital Subsidy Scheme for Technology Up Gradation (CLCSS) 4. Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) 5. 2% Interest Subvention Scheme

B)Incentive schemes –Since Independence(Total 17 B) Skill Development and Training Schemes 1. Entrepreneurship and Skill Development Programme (ESDP) C) Infrastructure Support Schemes 1. Scheme of Fund for Regeneration of Traditional Industries (SFURTI) 2. MSE Cluster Development Programme (MSE-CDP) D) Procurement and Marketing Support Schemes 1. Procurement and Marketing Support (PMS) Scheme 2. Procurement from Micro and Small Enterprises

B)Incentive schemes –Since Independence(Total 17 E) 1. 2. 3. 4. 5. Technology Up-gradation and competitiveness schemes Design Clinic Scheme Lean Manufacturing Competitiveness Scheme (LMCS) Digital MSME Scheme Financial Support to MSMEs in ZED Certification Scheme Support for Entrepreneurial and Managerial Development of MSMEs through Incubators 6. Building Awareness on Intellectual Property Rights (IPRs) 7. Tool Rooms & MSME Technology Centres

C) Outreach initiative for MSME sector on November 2 nd, 2018 1. Launch of 59 minute loan portal to enable easy access to credit for MSMEs 2. 2% interest subvention 3. Trade Receivables e-Discounting System (TRe. DS) 4. Central Public Sector Undertaking (CPSUs) units to make mandatory procurement of 25% instead of 20% from MSEs. 5. CPSUs to make mandatory procurement of 3% from Women Entrepreneurs out of 25% mandatory procurement. 6. CPSUs to compulsorily be part of Public Procurement Portal Government e. Marketplace(Ge. M). CPSUs to get their vendors registered on Ge. M portal.

C)Outreach initiative for MSME sector on November 2 nd, 2018 • Outreach initiative for MSME sector on November 2 nd, 2018 7. 20 Hubs and 100 Spokes in the form of Tool Rooms for Technological Upgradation to be established across the country with a fund allotment of Rs. 6000 crore 8. Clusters for Pharma MSMEs to be formed with a support of 70% financial assistance from Govt. of India. 9. Only one annual return to be filed for 8 Labour laws and 10 Union regulations to simplify Government procedures. 10. Computerized random allotment for visits to firms by Inspectors to simplify Government procedures 11. Environment Clearance and Consent - single consent Self. Certification 12. Simple procedure to correct minor violation under Companies Act

D) Aatma Nirbhar Bharat – MSME /Business Schemes • Collateral Free Automatic Loans of Rs. 3 lakhs crore • Rs. 20000 Crore – Subordinate Debt. • Rs. 50, 000 crore Equity Infusion • Global tenders in government procurement will be disallowed for up to Rs 200 crore or less.

Aatma Nirbhar Bharat – Total Stimulus At a Glance

MSMED ACT 2006 - Introduction • The act was published In gazette of India on 16 th June, 2006. • It came into force from 2 nd Oct, 2006 ( The birth date of father of Nation – Mahatma Gandhi) • A Welfare Legislation For SMEs • 6 Chapters, 32 Sections

MSMED 2006 - Introduction • Salient Features of Act 1. Industry replaced by enterprise which include service enterprises also. 2. Ambit of sector enlarged to cover medium enterprises. 3. Constitution of MSME Board 4. Simplification of registration procedure 5. Policy of preferential procurement from MSMEs 6. Progressive credit support 7. Penalty for delayed payments 8. Provision for exit policy

MSMED 2006 - Objectives 1. Remove impediments due to multiple laws 2. Introduce statutory consultative and recommendatory bodies on MSME policies 3. Improve registration procedures of MSMEs 4. Statutory basis for purchase preference and credit policies 5. Improve realisation of payments of MSMEs 6. To facilitate promotion, development and enhance competitiveness amongst SMEs. 7. To regulate the credit period and to improve liquidity position of SMEs. 8. To provide a single legal frame work for quick resolution of disputes

MSMED 2006 –Important Sections • S 15: Buyers Liability to make Payment • Where any supplier supplies any goods/ services, the buyer shall make payment there of on or before the date agreed upon between him and the supplier in writing. • Where there is no agreement in this behalf, before the appointed day; -15 Days • In no case the period agreed upon between the supplier and the buyer in writing shall exceed 45 days from the day of acceptance or the day of deemed acceptance

MSMED 2006 –Important Sections • S 16: Interest on Delayed Payments • S 17: Payment with Interest • S 18: Arbitration and Conciliation • S 23–INTEREST NOT DEDUCTIBLE • S 24–Overriding Effect

Am I MSME? (MSME Definition) • Revised MSME Classification (Refer Finance Minister Announcement dated 13 th May 2020 to boost the Economy under COVID 19 Scenario) • (Composite Criteria – Investment and Annual Turnover) in Rupees Classification Manufacturing and Service Enterprise Micro Investment < 1 Cr. and Turnover < 5 Cr. Small Investment <10 Cr and Turnover < 50 Cr. Medium Investment <50 Cr. and Turnover < 250 Cr.

MSME Definition – Implication of Changes • Change in criteria. It does away with only investment criterion and instead proposes to define MSMEs on the basis Investment and annual sales turnover • There is no distinction between manufacturing and service unit. • There will be substantial increase in the number of units under the ambit of MSMED Act. • This will encourage ease of doing business, make the norms of classification growth oriented and align them to the new tax regime revolving around GST (Goods & Services Tax). This will boost the Indian Economy. • The Turn-over based criterion resolves many of the ills of earlier regime. It is transparent, as authorities could always cross check the turnover through platforms such as GSTN

MSME - Earlier Definition • (Criteria – Investment in Plant and Machinery and Equipment) Classification Manufacturing Enterprise Service Enterprise Micro Rs. 25 Lakh Rs. 10 Lakh Small Rs. 5 Crore Rs 2 Crore Medium Rs 10 Crore Rs 5 Crore

MSME - Definition • Exclusions from Investments • Pollution control, R&D, industrial safety devices • Tools, jigs, dies, molds, spare parts & consumables • Installation and transportation cost of P&M • Generator, Extra transformer • Gas producer Plants • Cost of Know-how for P&M • Fire fighting Equipment

– Registration (UAM) Registration(MSME UAM) Salient Features 1. Registration – Either Online or Offline 2. Simple Process – One page application 3. No Processing Fees 4. Documents Required ü ü Personal Aadhaar number, Industry name, address, Bank account details and some common information. 5. Self-attested. – No audit certification 6. Once the business man has applied he/she will get the Udyog Aadhar number on his registered mail ID. 7. If a person wants to do registration for more than one industry then also he/she can do individual registration.

MSME – Registration (UAM) Advantages of Registration 1. Once you have registered with MSME you would be getting all government scheme benefits like without guarantee loan, easy loan, loan with low rate of interest. 2. You would be getting the financial support to participate in foreign expo. 3. Your industry would be getting the government subsides

UAM – Application Form Registration Form • Note: Lifetime Valid Certificate for both Manufacturing and Service Industry Applicant Name Mobile No. Email Address Aadhaar Number Social Category Gender Are you Physically Handicapped? Name of Enterprise / Business Type of Organisation

UAM – Application Form 1. PAN Number Location of Plant/Address Office Address State Area Pin Code Date of Commencement of Business Bank Account Number IFSC Code Main Business Activity of Enterprise Additional details about Business Upload Aadhaar Card of Applicant Number of employees Investment in Plant and Machinery (Amount in Lacs) I hereby declare that information provided in the online registration form is true to the best of my knowledge and I accept terms, disclaimers, and policies by clicking the "Proceed & Pay" button. 1. NOTE: Once you submit the application form successfully we will contact you soon by e-mail or call.

Registraion – UAM –Site Details • Reference: 1. www. http// Udyog Aadhaar Gov. in 2. Udyog Aadhaar Booklet 3. www. support@legalwiz. in login/register 4. www. MSME helpline No of MSME Registered :

Prime Minister’s Employment Generation Programme (PMEGP) • Objectives • to generate employment opportunities in rural as well as urban areas of the country through setting up of new self-employment ventures /projects/micro enterprises. • to provide continuous and sustainable employment to all segments of traditional and prospective artisans and rural/urban unemployed youths in the country, so as to help and to arrest migration of rural youths to urban areas. • Third objective is to increase the wage earning capacity of artisans and contribute to increase in the growth rate of rural and urban employment.

Prime Minister’s Employment Generation Programme (PMEGP • Nodal Agency • National Level : Khadi and Village Industries Commission (KVIC) – • State Level : State KVIC Directorates, State Khadi and Village Industries Boards (KVIBs) and District Industries Centres (DICs) and Banks. • Nature of Assistance • Project cost – Mfg – 25 lakhs, Service sector – 10 laksh • Subsidy of Project cost • General category – Urban 15 % of project cost, Rural – 25% • Special Category – SC, ST, Women, OBC, Ex- Servicemen – Urban 25 % Rural – 35%

Prime Minister’s Employment Generation Programme (PMEGP • Who can Apply • Any individual – age 18 years, Education – 8 th std pass • Self Help Groups, Institutions registered under Societies Registration Act 1860; • Production Co-operative Societies and Charitable Trusts are also eligible. • How to apply: Only online application is accepted. • The beneficiaries can submit their application online at https: //www. kviconline. gov. in/pmegpeportal/pmegphome/index. jsp.

Prime Minister’s Employment Generation Programme (PMEGP) • Whom to Contact: Khadi and Village Industries § Office : Commission (KVIC), “Gramodaya” 3, Irla Road, Vile Parle (West), Mumbai-400056 (Maharashtra), § Helpline www. kvic. org. in, Email: kvichg@bom 3, vsnl. net. in § Fax- 022 -26711003, § Tel-022 -26714320 - 25/26716323.

Credit Linked Capital Subsidy Scheme for Technology Up-gradation (CLCSS) • Objective • To facilitate technology to MSEs through institutional finance for induction of well established and proven technologies in the specific sub-sector/products approved under the scheme. • Nature of Assistance: • Upfront subsidy of 15% on institutional Credit upto Rs. 1. 0 Crore (i. e. subsidy cap of Rs. 15. 00 lakh) for identified sectors/ subsectors/ technologies. • Who can apply: Any Micro and Small Enterprises (MSEs) unit

Credit Linked Capital Subsidy Scheme for Technology Up-gradation (CLCSS) • How to apply: • Approach 11 nodal Banks / Agencies. ü SIDBI, NABARD. ü SBI, Bo. B, PNB, BOI, TIIC, Andhra Bank, Corporation Bank, Canara Bank and Indian Bank. • Whom to Contact: • Nodal Banks/Agency under the scheme and MSME-Development Institutes under DC-MSME.

Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) • Objectives • To provide collateral free loan up to 200 lakhs • Nodal Agency • Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE). The trust is established by Ministry of Micro, Small and Medium Enterprises and Small Industries Development Bank. The corpus of CGTMSE is contributed by Government of India and SIDBI. • Nature of Assistance: • Collateral free loan up to a limit of ₹ 200 lakh. • Who can apply: • New as well as existing Micro & Small Enterprises.

Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) • How to apply: • MSE meeting the eligibility criteria • Approach to eligible Banks / Financial Institutions/ Regional Rural Banks/NBFCs. • Whom to Contact: • CEO, CGTMSE, SIDBI, Swavalamban, Bhavan, C-11, G-Block, BKC, Bandra (East), Mumbai-400051.

2% Interest Subvention Scheme • Objective The Scheme aims at encouraging both manufacturing and service enterprises to increase productivity and provides incentives to MSMEs for on boarding on GST platform which helps in formalization of economy, while reducing the cost of credit. Effective Period The Scheme will be in operation for a period of two financial years FY 2019 and FY 2020 (1 st Nov 2018 to 31 st March 2019 and FY 1019 -20 Full Year) Note: It is indicated that it will be extended for further period.

2% Interest Subvention Scheme • Salient Features 1. All business enterprises can take the benefit. UAM and GSTN is not mandatory. 2. Traders can also take benefit ( Refer circular No RBI/2019 -20/155 FIDD. CO. MSME. BC. No. 17/06. 02. 031/2019 -20 February 5, 2020 3 Incremental term loan or fresh term loan or incremental or fresh working capital extended during the current FY viz. from 2 nd November 2018 and next FY would be eligible for coverage 4 The term loan or working capital should have been extended by Scheduled Commercial Banks 5 Eligible for coverage to the extent of ₹ 100 lakh only during the period of the Scheme. 6 If MSME is availing subvention under any other scheme, not eligible

2% Interest Subvention Scheme • Operational formalities 1. Date of disbursement is important since it is on incremental 2. Subvention at 2% pa. 3. No interest subvention shall be admissible for any period during which the account remains NPA. • Claim Submission 1. Lending institution will submit data to SIDBI at three level Annexure I – at Bank level Annexure II – at Bank Level ( Branch wise detail) Annexure III At Bank Level but data should come from branch with client details ( Name, Account Number – total 18 column in annexure)

2% Interest Subvention Scheme • Claim Submission 2. The Half Yearly claims shall be submitted to the Chief General Manager, Institutional Finance Vertical, SIDBI, Mumbai. 3. 5. Disbursement against each claim to individual institution shall be only after release of funds from Mo. MSME. • Other Important Points 1. Nodal Agency – SIDBI 2. Responsibility of accurate data with lending institution. Data must reconcile with all three annexure 3. Claim certification by statutory auditor of lending institution 4. Interest subvention amount shall be released by SIDBI subject to availability of funds from GOI. 5. Mo. MSME, GOI will be the final authority

2% Interest Subvention Scheme • Observations 1. Scheme has not reached to all MSMEs 2. Lending institutions are not playing very active role 3. MSMEs has to follow up with the lending institutions and get it done 4. Subvention calculation is complicated especially on CC limit where interest is charged on daily utilization basis. 5. Great opportunity to professionals