MSMEs may get up to Rs 1 lakh crore salary support
- KBN KnockIOT
- Jul 16, 2020
- 1 min read
As per report by Anandita Singh Mankotia, ET Bureau
NEW DELHI: The government is discussing ways to boost consumer demand in the economy, with one option being the possibility of providing salary support of up to Rs 1 lakh crore over the next three years to MSMEs which employ a certain minimum number of employees, as a way to boost demand in the economy.
“This is one way to boost the demand in the economy which has been suffering,” a senior government official told ET. At present there are close to 6 crore MSME’s in the country and they form the backbone of the economy, the official said.
The official added that a minimum number of employees hired by the unit could serve as selection criteria and the support could be extended for up-to three years.
MSME’s have been at the core of financial package of the Modi government, which in May announced a Rs 3 lakh crore emergency credit line guarantee scheme (ECLGS) under which 100% guarantee coverage will be provided by the National Credit Guarantee Trustee Company for additional funding of up to Rs 3 lakh crore to eligible MSMEs and interested Micro Units Development and Refinance Agency (MUDRA) borrowers in the form of a guaranteed emergency credit line (GECL) facility.
Last week, the finance ministry said banks had sanctioned loans of about Rs 1.2 lakh crore under ECLGS. However, disbursements against this stood at a little over 61,000 crore till then.
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The government's plan to offer salary support to MSMEs aims to boost economic demand, similar to how an Ipl id provider enhances access to IPL platforms for fans.