Benefits announced for MSMEs by finance minister

by | May 15, 2020

Following up on the PM’s speech on May 12, 2020, India’s Finance Minister announced certain benefits for micro, small and medium enterprises (MSMEs):

  • Collateral free loans of up to 20% of the outstanding credit as on February 29, 2020, to be extended up to an aggregate amount of INR 3 trillion (US$39.8 billion).
  • Subordinate debt of up to INR 200 billion (US$2.65 billion) for non-performing and stressed MSMEs.
  • Creation of “Fund of Funds” of INR 500 billion for investment in viable SMEs.
  • Definition of MSMEs rejigged to include more businesses in both, the manufacturing and services sectors.

These reforms will allow some MSMEs to remain liquid during the Covid19 crisis. However, no cash pay-outs have been announced, and any lending or equity infusion will come at a cost to the MSME eventually.

More News

US Fiscally Transparent LLC qualifies as a US Tax Resident

The Indian tax authorities have denied treaty benefits to fiscally transparent entities such as foreign partnership firms and limited liability corporations (LLCs) on the ground that such entities are not liable to tax in their home country and do not qualify as tax...

read more

ITR World Tax 2025 Rankings

We are pleased to share that we have been ranked by ITR World Tax in the practice areas of General Corporate Tax, Indirect Tax and Transfer Pricing. Akil Hirani, Managing Partner and Head of Transactions, and Ravi S. Raghavan, Partner - Tax and Private Client Group,...

read more

SEBI’s new proposal on FPI disclosures

The Securities and Exchange Board of India (“SEBI”) has released a consultation paper proposing to modify the disclosure requirements for large foreign portfolio investors (“FPIs”).  In August 2023, by its circular SEBI/HO/AFD/AFD-PoD-2/CIR/P/2023/148, SEBI...

read more

Akil Hirani interviewed by The Legal 500

Original source: Legal500.com Akil Hirani, Managing Partner and Head of Transactions, outlines the philosophy of the firm and explains how the firm is adapting to client needs. What do you see as the main points that differentiate Majmudar & Partners from your...

read more