Govt rolls out measures to support MSMEs with regulatory relief and credit access

The Indian Government has taken several steps to help Micro, Small, and Medium Enterprises (MSMEs) thrive, with an emphasis on lessening regulations, giving financial rewards, and making it easier to borrow money.

"The Government of India through Bureau of Indian Standards (BIS), Department of Consumer Affairs, Ministry of Consumers Affairs, Food & Public Distribution implements, phase-wise, Quality Control Orders (QCOs) issued by the line Ministries with exemptions/relaxations for MSMEs, to ensure that Quality Control Orders (QCOs) do not disrupt domestic production," the official statement read.

The major exemptions include:

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• Six-month extension for micro enterprises and three-month extension for small enterprises.
• Exemption for imports by domestic manufacturers producing export-oriented products.
• Import exemption of up to 200 units for research and development purposes.
• Provision for clearance of legacy stock within six months from the effective date.

BIS offers financial and technical support

To encourage MSMEs, the Bureau of Indian Standards (BIS) has granted an 80 per cent concession for micro enterprises, 50 per cent for small enterprises, and 20 per cent for medium enterprises in the annual minimum marking fee.

Additionally, a further 10 per cent concession is available to units in the northeast region or women-led MSMEs.

MSMEs are no longer required to maintain in-house laboratories and can utilise BIS-recognised external labs, NABL-accredited labs, or share cluster-based lab resources.

The ‘Levels of Control’ in the Scheme of Inspection and Testing (SIT) are now recommendatory, allowing manufacturers to define their own control unit, batch, or lot. BIS has also made product certification guidelines publicly accessible on its website and is releasing manuals for conformity assessment according to Indian Standards.

RBI measures to enhance credit flow

To improve monetary policy transmission, the Reserve Bank of India (RBI) has advised banks to link MSME loans to an external benchmark, reducing the reset clause for loans to three months.

Lenders, in addition to providing a switchover option to the existing borrowers on mutually agreed terms.

Other measures to be included in the package are:

Mutual Credit Guarantee Scheme (MCGS-MSME): Guarantees the full amount of the loan, which the lender takes for buying new equipment and machinery, up to Rs 100 crore.

Priority sector lending guidelines: Specific targets for MSME lending have been prescribed.

No collateral loans: Scheduled Commercial Banks are directed to give loans up to Rs 10 lakh to MSE units without requiring any collateral.

Creation of working capital: Up to Rs 5 crore of borrowing limit should be based on almost 20 per cent of the projected annual turnover