Govt to soon approve Rs 10,000 cr ‘Fund of Funds’ for MSMEs with high credit rating

Union Minister Nitin Gadkari said the Fund’s corpus will be open to MSMEs with AAA credit rating.
Govt to soon approve Rs 10,000 cr ‘Fund of Funds’ for MSMEs with high credit rating
Govt to soon approve Rs 10,000 cr ‘Fund of Funds’ for MSMEs with high credit rating
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Union Minister Nitin Gadkari said that a ‘Fund of Funds’ worth Rs 10,000 crore will soon be approved by the government to acquire up to 15% stake in MSMEs. This will apply to the MSMEs that want to list on the bourse and raise money from the capital markets. 

Further, a separate scheme is being devised to assign credit rating to MSMEs based on their annual turnover, exports and GST payments. The National Small Industries Corporation or another government body will control the Fund of Funds, Gadkari added. 

The Minister said the government wants MSMEs with AAA credit rating to utilise the Fund’s corpus. The AAA rating signifies high credit worthiness.  

On Wednesday, Gadkari held talks with the representatives of the micro, small and medium enterprises (MSME) industry and assured all possible help from the government to tide over the challenges created by the coronavirus-enforced lockdown.

The MSME Minister held separate meetings via video conferencing with the members of the All India Plastic Manufacturers Association (AIPMA), and the PHD Chamber of Commerce & Industry, from his residence in Nagpur.

During the meeting, the representatives raised some concerns related to the industry and also gave suggestions to the minister.

Some of the issues they pointed out and the suggestions they gave included: waiver of fixed charges on utility (electricity, water) bills, extension of moratorium for certain payments, inclusion of certain goods in the category of essential commodities, payment of salaries to workers during lockdown from their ESI and Provident Fund, addressing liquidity crunch through subsidy, extension in GST payment, relief in transportation for exports of goods.

Gadkari noted down their suggestions and assured them that he would take up the issues with the Union Finance Minister and the Reserve Bank of India (RBI).

"The suggestions related to my department (MSME) will be addressed immediately...We are standing with you. But the industry should also see that other stakeholders like banks, financial institutions and electricity sector are also feeling the heat and need our support," he said.

Gadkari said that the industry should work together and tap the opportunities that will be created when the coronavirus crisis gets over.

He said that several leading countries are planning to move their production units from China, which can be an opportunity for the Indian industry.

With PTI inputs

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