Govt to infuse Rs 20,000 crore subordinate debt for stressed MSMEs
New Delhi, June 01: Union Minister Prakash Javdekar said the government has taken key steps to boost MSMEs and Rs 20,000 crore has been infused into the sector.
"The Cabinet today has approved Rs 20,000 crore subordinate debt for stressed MSMEs, this will benefit 2 lakh stressed MSMEs," he added.
The central Cabinet approved equity infusion of Rs 50,000 crore for MSMEs and sanctioning two separate funds, a distressed asset fund of a Rs 20,000 crore and fund-of-fund.
The Distressed Assets fund aims at extending support to promoters of distress units.
Under the scheme, the central government will provide guarantee coverage of up to 85 per cent for loans up to Rs 5 lakh and 75 per cent for loans beyond Rs 5 lakh from financial institutions.
The Rs 20,000 crore fund is expected to benefit nearly two lakh MSMEs.
Meanwhile, the government further amended the definition of MSME. Turnover limit for medium enterprises has been revised upward to Rs 250 crore (from Rs 100 crore as announced earlier).