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Benefits Provided to MSMEs Under New Economic Package of 20 Lac Crores by Government

A whopping 20 lac crore fund by the government has been passed which is almost 10% of Indian GDP.
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The whole world is suffering from coronavirus pandemic.

Lockdown announced by various Governments may result in permanent lockdown for a lot of businesses.

The economy is in a fix to taste the biggest ever recession in history. Being confident of a powerful leader, Indians expected revolutionary reforms to unlock the economy.

The announcements were fast and the 20 lack crore package was trending.

We will be discussing here what’s in it for you?

A whopping 20 lac crore fund by the government has been passed which is almost 10% of Indian GDP.

That means INR 15k per person in a 130 Cr populated country.

But hold on, will you get a penny out of it? Let’s see!!!


This economic package by the government may help SMEs to regain position at the market. Reforms focused on various small and medium businesses, industrial units, agriculture sector and so on.“MSME”, (the buzz word) plays a very vital role in contribution towards GDP.

To help and encourage MSME units, the Indian government announced various packages to finance them at a very cheap rate. Excited to know what are these schemes and how to benefit from them?


Let us discuss point by point:

More businesses in MSME ambit:

At the time of introducing such package, Honorable finance minister Nirmala Sitharaman has given new definition to MSME by eliminating the difference between the manufacturing sector and service sector.

New threshold limits for micro, small and medium units have been given benefiting 45 lakhs new units. For people interested in obtaining MSME Registration for their small scale business, it is a piece of good news.

3 Lakh Cr Collateral free loan:

Out of 20 lakh crore, Ministry of finance allocated INR 3 lakhs crore to SME’s as collateral-free loans.

Under such packages, the micro and small firms are providing opportunities to raise loan from banks and the financial institution at a nominal interest rate with the retention period of up to 12 months (maximum duration of the loan is 4 years).

Under this package, the major relief is that the government provide a guarantee of a loan to lenders on full amount without any guarantee fees.

20k Cr to stressed SMEs:

Apart from the above government also allocated amount of

INR 20,000 crore to those MSME’s units who are facing the problem of Equity.

The amount of 20,000 Crore is provided as subordinate debt for equity stressed MSME units.MSME registration in India will become a little easier.

Rs. 50,000 crores Fund of Funds:

Equity infusion for MSMEs through fund of funds scheme. This will benefit fast-growing industries to raise funds through Private Equity.

If you are an SME with high growth prospects, have you ever thought to make it big? Yes, all Big Bs (businesses) were SMEs at some point in time. And when they can do, we can too. Govt.fund of funds scheme is a strategy of investing in professional funds which in turn invests in businesses.

Let’s be ready with our business plans and financial models. Certainly, we will get you to list of Private Equity players where you can shoot your decks in other articles.

B2G opportunities:

Atma Nirbhar Bharat dream foundation is laid with a decision to not allow foreign companies to apply for Government tenders of less than 200 Cr. 5. Early recoveries from Government departments: Government also promised to clear all receivables of MSME with the government which will be released within 45 days.

Other than above mentioned benefits, the Government also gave relief for various tax filings due dates and rates of tax.

Why not consult experts to know how to get something out of the treasure.

Starters’ CFO ensures that its clients are getting fully benefitted from Government initiatives.

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