Credit and Finance for MSMEs: The quantity of micro and compact enterprise (MSE) units supported below the government’s pet scheme to facilitate technologies upgradation Credit Linked Capital Subsidy Scheme (CLCSS) has hit a 5-year higher for the duration of FY21. According to the offered information from the MSME Ministry, the total quantity of MSE units supported below CLCSS for the duration of FY21 stood at 15,188 in comparison to 4,011 units supported in FY17 followed by 4,081 in FY18, 14,155 in FY19, and 7,779 in FY20. Moreover, the quantity of capital subsidy help was also highest in FY21 at Rs 1,one hundred.87 crore vis-à-vis Rs 256.53 crore subsidy help in FY17, Rs 260.54 crore in FY18, Rs 980.44 crore in FY19, and Rs 540.83 in FY20.
Number of MSE units supported below CLCSS (FY17-21)
“With a severe labour shortage across the nation, small businesses have made automation and technology adoption their top priority. While it’s heartening to see the growth in CLCSS subsidies but for India to achieve 50 per cent GDP from MSMEs ahead, it is highly imperative that the CLCSS scheme is expanded further to benefit more small businesses,” Vishal Devnath, Founder of SME-focused on the web investment bank SMERGERS told TheSpuzz Online.
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The scheme intended to provide a capital subsidy of 15 per cent on institutional finance of up to Rs 1 crore availed by MSEs for upgradation of their plant and machinery with the most recent technologies. The government had updated the scheme in 2019 to enhance credit access to MSEs along with a 10 per cent additional subsidy to SC/ST entrepreneurs beyond the current 15 per cent subsidy. “In our National SC/ST Hub, there is a subsidy of 15 per cent up to a loan of Rs 1 crore for technology upgradation in CLCSS but we are also offering a 10 per cent extra subsidy that will be given to SC/ST entrepreneurs,” former MSME Secretary Dr Arun Kumar Panda had mentioned for the duration of the relaunch of the scheme.
Gujarat, Maharashtra, and Punjab have been the states with the highest quantity of MSE beneficiaries at 6,240, 2,873, and 1,605 respectively. Overall, 45,214 MSE units have been supported involving FY17 and 21 with Rs 3,139.21 crore of subsidy help. Importantly, digitisation of MSMEs has been amongst the vast untapped possibilities that startups have now been catering to. As a outcome, investment in startups focusing on enabling technologies enhance amongst MSMEs had shot up in 2020. According to a report titled India Impact Investment Trends by India Impact Investors Council (IIC), funding in such startups had jumped to $51 million across nine offers in 2020 from $6 million in 2019. The 2020 share was 16 per cent of the total tech investment in 2020 up from 3 per cent in 2019. The total investments stood at $331 million across 34 offers in 2020 in comparison to $188 million across 43 offers, according to the report. Among leading startups, which focused on the SME technologies sub-segment, raising capital in 2020 integrated PagarBook, FloBiz, and Salesken.