Exclusive: Cabinet to clear 100% credit guarantee coverage for exporters, MSMEs today, say sources

The Union Cabinet is likely to discuss and approve a special package for exporters, MSMEs and SMEs in a meeting scheduled on Wednesday. The central government's top policy-formulating body, chaired by Prime Minister Narendra Modi, could clear a working capital loan facility for exporters as well as for the SME and MSME sectors, sources told Zee Business.

The proposal aims to strengthen small businesses through financial support, interest rate subsidies, loan restructuring and technology upgrades. Aligned with the government’s 'Make in India' and 'Atmanirbhar Bharat' drives, the package is expected to benefit millions of MSME units.

Zee Business had reported that the Cabinet approval for such a package, worth an estimated Rs 20,000 crore, was likely soon.

MSMEs have urged the central government to boost manufacturing in the space, giving priority to SME and MSME vendors on its Government e-Marketplace (GeM) portal. They have also suggested that the government consider compulsory procurement from MSMEs in official tenders, said the sources.

Calling for easier funding schemes for MSMEs and small exporters, industry representatives have sought a policy to include the segment under the government's production-linked incentive (PLI) scheme, as well as relief from quality control orders (QCOs) for operating in employment-generating sectors.

They have also demanded, said the sources, that affordable solar panels be made available for SMEs and MSMEs, on the lines of the PM Surya Ghar scheme.

Over the years, the central government has taken a host of measures aimed at strengthening and promoting the credit support, formalisation, skill development, innovation, market access, gender inclusion, and cooperation in the SME and MSME space.

With more than six crore enterprises, the MSME sector forms a vibrant and dynamic part of the country's economy, second only to agriculture in employment generation at comparatively low capital cost. The Ministry of Micro, Small & Medium Enterprises promotes growth in the space through credit, technology, infrastructure, skill development, competitiveness and market assistance.

The government's credit schemes, like PMEGP and SRI Fund provide subsidies, margin money and equity funding to micro-enterprises, driving employment generation.