Promotional package for micro

New Delhi, Mar 2 (UNI) The Government today announced a promotional package for micro and small enterprises (MSEs) promising to raise the corpus of the Credit Guarantee Fund to Rs 2,500 crore in the next five years.

The eligible loan limit under the scheme will be hiked to Rs 50 lakh and the credit guarantee cover from 75 per cent to 80 per cent for micro enterprises for loans up to Rs 5 lakh, Minister of Small Scale Industries&Agro and Rural Industries Mahabir Prasad informed the Rajya Sabha today.

As much as 80 per cent guarantee cover will be provided to MSEs operated or owned by women, the Minister said in a statement he tabled at the fag-end of the day.

The Fund will continue to be managed by the Credit Guarantee Fund Trust for Small Industries (CGTSI) -- which will be renamed Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE).

The Minister also announced that the Government would soon enact a legislation on Limited Liability Partnerships covering micro, small and medium enterprises to facilitate infusion of equity and venture capital funding in these enterprises.

The Small Industries Development Bank of India (SIDBI) will strengthen its credit operations for micro enterprises and cover five million additional beneficiaries over five years beginning 2006-07.

The Government will provide grant to SIDBI to augment the Bank's Portfolio Risk Fund for this purpose.

SIDBI's direct lending operations will be expanded by increasing the number of branches from 56 to 100 in two years to cater to the credit needs of more clusters of MSEs.

For comprehensive and speedier development of such MSE-clusters, the existing guidelines of the Small Industries Cluster Development Programme (SICDP) -- to be renamed Micro and Small Enterprises Cluster Development Programme (MSECDP) -- will be reviewed. The ceiling on project cost will be raised to Rs 10 crore.

Four Training-cum-Product Development Centres (TPDCs) for agro and food processing industries would be set up at identified existing Small Industries Service Institutes (SISIs) to facilitate promotion and development of MSEs in the food processing sector.

Vertical Shaft Brick Kiln (VSBK) technology would be promoted for adoption by MSEs engaged in manufacturing bricks to make them energy efficient and eco-friendly. For this, a one-time capital subsidy -- limited to 30 per cent of the cost or Rs 2 lakh, whichever is less -- will be provided to micro and small brick manufacturing enterprises.

A technology mission will be established to assist micro, small and medium enterprises (MSMEs) in technology upgradation, energy conservation and pollution mitigation, the Minister said.

UNI