ReStart Programme for MSMEs

ReStart Programme for MSMEs by Andhra Pradesh

ReStart Programme for MSMEs has been launched by the Andhra Pradesh Chief minister in order to support the MSME Sector in the State.

ReStart Programme for MSMEs by Andhra Pradesh

Source | The Hindu

GS Paper II: Government policies and interventions for development in various sectors and issues arising out of their design and implementation.

Context: In a recent move, Chief Minister of Andhra Pradesh has launched “ReStart Programme” for MSMEs to support the Micro, Small and Medium Enterprise (MSME) sector in the State.

ReStart Programme for MSMEs

Read More: Emergency Credit Line Guarantee Scheme (ECLGS)

What you need to know about the ReStart Program for MSMEs?

  • As part of the package, the government will spend Rs. 1,100 crore on revival of the sector which is expected to benefit 98,000 units that provide employment to more than 10 lakh people.
  • Apart from above, a special fund of ₹200 crore will provide input capital loan to the firms at low interest rates.
  • As part of the Scheme, the minimum power demand charges of the MSMEs for the months of April, May and June, amounting to Rs. 188 crore to be waived off.
  • Further, the government will purchase around 360 products from the MSMEs, and payments towards it would be cleared in 45 days. Of the total purchases,
    • Almost 25% would be done from the micro and small enterprises.
    • 4% from the SC/ST community enterprises.
    • 3% from women entrepreneurs.
  • Skills required by the industries (MSMEs) will be imparted through Skill Development Colleges.


What is the importance of MSMEs for Indian Economy?

  • MSME Sector is the second largest employment generating sector after agriculture. It provides employment to around 120 million persons in India.
  • With around 36.1 million units throughout the geographical expanse of the country, MSMEs contribute around 6.11% of the manufacturing GDP and 24.63% of the GDP from service activities.
  • Further, the MSME ministry has set a target to up its contribution to GDP to 50% by 2025 as India becomes a $5 trillion economy.
  • Apart from above, MSMEs contributes around 45% of the overall exports from India.
  • MSMEs promote inclusive growth by providing employment opportunities in rural areas especially to people belonging to weaker sections of the society.
  • Small industries and retail businesses in tier-II and tier-III cities create opportunities for people to use banking services and products as part of financial inclusion initiative of MSMEs.

What is the new revised definition of MSME?

Under the new MSME Classification, MSMEs will now be defined in a composite manner, taking both investments as well as turnover into account. Following table depicts the required classification:

MicroUpto Rs. 1 croreUnder Rs. 5 crore
SmallUpto Rs. 10 croreUpto Rs. 50 crore
MediumUpto Rs. 20 croreUnder Rs. 100 crore

Also Read: Major Stimulus Package for MSMEs amid COVID-19

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