Auto parts suppliers hail govt’s six mega moves for MSMEs
The centralized economic stimulus on Micro, Small and Medium Enterprises (MSME) comes just days after Prime Minister Narendra Modi announced a 20 trillion mega package to revive the Indian economy.
The Union Finance Minister (FM) has announced six key measures including collateral-free loans, changes in the definition of SMEs, and an increase in the scope of these units. When automobile sales fell, parts or working MSMEs in this sector were more likely to be hit by a lack of end-user demand.
Welcoming the change in the definition of MSME, Deepak Jain, president of the Automotive Component Manufacturers Association (ACMA), said it was a long-standing need of the industry committee. “With this new classification, a large number of ACMA members will benefit from the dominance of small businesses in this segment,” says Jain. MSME accounts for over 85% of the auto component space.
In today’s announcement, Collateral Free Automatic Loan FM offers MSMEs up to Rs 3 lakh crore over a period of 4 years, helping them to start a business and save jobs.
With this new classification, a significant number of ACMA members have benefited from the domination of small firms. Deepak Jain, ACMA President
In addition, the government has also broadened the MSME definition with a turnover of up to Rs 50 crore for businesses and small businesses with investments of Rs 10 crore. Similarly, businesses with investments up to Rs 20 crore and turnover of up to Rs 100 crore can be classified as medium businesses.
In addition, increasing liquidity through collateral-free auto loans and the Subordinate Debit Scheme will reduce the pressure on working capital the sector is facing, Jain said.
The Jain government, however, urged the government to bring in an isolated package to create demand for the automotive sector. Jain added: “We are tracking the automotive industry backed by a unified GST rate and incentive-based scrappage policy on all vehicles and vehicle components.
Leaders in the auto industry must now educate and professionalize our Tier 2, 3, and 4 SMEs so that they can access these GOI support systems and not lose them. Vinay Pipersania, Consulting Director, Hella India Lighting MD Ramashankar Pandey said, “Mortgage-free loans to MSMEs in the automotive industry of CarPoint Point Research will enhance the sentiments of downstream sellers in the automotive industry.” “Collateral free loans are a great help to the auto industry to meet the working capital needs of low-level sellers, and it should be readily available to support MSME’s need to invest in automated technologies,” he added.
Hella India Lighting MD Ramashankar Pandey said the current system will help overcome shortcomings and make MSME players more independent in the auto space. “Leaders in the auto industry must now educate and professionalize our Tier 2, 3, and 4 SMEs so that they can access these GOI support systems and not lose them. Due to fragmented confidence, we have to take a lot of our hands at high risk for scale-up.” Invest in management, R&D, and the training of their human resources. ” Ande asserted.
Repeating similar views, Sona ComStar chairman Sanjay Kapoor said the timely announcement of the government would resolve the existence of MSMEs. “For many small businesses that are the backbone of our country, this is a good first step towards solving the problem of survival, and the steps taken to assist them in the direction of collateral-free loans and funds.