Prime Minister Narendra Modi on Friday launched a programme to give speed loans of up to Rs 1 crore in under 59 minutes to small and medium businesses.
The BJP-led government’s move is been seen by many as a way to win back small businesses that were hit badly by the twin decisions to demonetise currency and bring in the goods and services tax. The measures had put small traders at a disadvantage and raised their compliance costs.
“As we speak, somewhere in the country your entrepreneurial brother or sister is getting a loan ... sanctioned in just 59 minutes...Think, only 59 minutes. Just 59 minutes,” Modi said on Friday.
This came with a promise of subsidy of 2 per cent on new loans or incremental loans of up to Rs 1 crore and a 5 per cent subsidy for export credit and a promise that state-run firms would buy a quarter of their purchases from small businesses.
The promise of quick money lifeline to a stuttering sector hit by global slowdown and domestic policy upheavels also comes after rival Congress party president Rahul Gandhi promised earlier this year that he would shift the focus of India’s economic policy towards supporting small and medium-sized firms if the Congress won back power. “The focus has to shift to developing small and medium businesses,” Gandhi had said at the London-based International Institute of Strategic Studies. Last week, he also promised that his party will overhaul the GST.
Officials said state-run banks have been told to install software that will allow them to process online loan applications. Businesses need to submit GST and tax details, along with their bank statement, to be eligible for speedy loan sanctions. The link to the portal will be through the GST portal, Modi said.
Factory visit
Modi on Friday announced that inspections of factories in the MSME sector will be sanctioned only through a computerised random allotment and inspectors will have to upload reports on portal within 48 hours. “No inspector can now go anywhere. He will be asked why he went to a factory,” he said.
