The Union Cabinet, chaired by Prime Minister Narendra Modi met on Monday for the first time in the second year of the NDA government and took various decisions related to the MSME sector, agriculture street vendors. 

As per the announcement made by Finance Minister Nirmala Sitharaman last month, the Cabinet approved a package to revive the Micro, Small and Medium Enterprises that have been badly hit by the COVID-19 pandemic and lockdown. 

The decision to change the definition of MSME was taken beside a liquidity package. 

Now, micro manufacturing and services unit will be those with up to Rs 1 crore of investment and Rs 5 crore of turnover. The limit of small unit was increased to Rs 10 crore of investment and Rs 50 crore of turnover. Similarly, the limit of a medium unit was increased to Rs 20 crore of investment and Rs 100 crore of turnover. 

This revision was done after 14 years since the MSME Development Act came into existence in 2006.

"After the package announcement on May 13, there were several representations that the announced revision is still not in tune with market and pricing conditions and it should be further revised upwards. Keeping in mind these representations, the Prime Minister decided to further increase the limit for medium manufacturing and service units. Now it will be Rs. 50 crore of investment and Rs. 250 crore of turnover," the government said in a press release. 

It has also been decided that the turnover with respect to exports will not be counted in the limits of turnover for any category of MSME units whether micro, small or medium, it added. 

The Ministry of Housing and Urban Affairs has launched a Special Micro-Credit Facility Scheme - PM SVANidhi or PM  Street  Vendor's Atma Nirbhar Nidhi for providing affordable loans to street vendors. 

Over 50 lakh people, including vendors, hawkers, thelewalas, rehriwala, theliphadwala etc in different areas contexts are likely to benefit from this scheme, the government said in a press release.

The goods supplied by them range from vegetables, fruits, ready-to-eat street foods, tea, pakodas, breads, eggs, textiles, apparel, footwear, artisan products, books/ stationaries etc. The services also include barber shops, cobblers, pan shops and laundry services, it added. 

This is for the first time in India’s history that street vendors have become beneficiaries of an urban livelihood programme, it further said. 

The vendors can avail a working capital loan of up to Rs. 10,000, which is repayable in monthly instalments in the tenure of one year. On timely/early repayment of the loan, an interest subsidy at 7% per annum will be credited to the bank accounts of beneficiaries through Direct Benefit Transfer on six monthly basis. There will be no penalty on early repayment of the loan.

The scheme provides for escalation of the credit limit on timely/ early repayment of loan to help the vendor achieve his ambition of going up on the economic ladder.

It is for the first time that MFIs/ NBFCs/ SHG Banks have been allowed in a scheme for the urban poor due to their ground level presence and proximity to the urban poor including the street vendors.

Another major decision was taken to revise the MSP of Kharif crops. 

For the Kharif season 2020-21, the government has fixed the MSP at a level of at least 1.5 times of the cost of production. The MSP of 14 crops for the Kharif season 2020-21 has been announced, based on the recommendation of CACP. The return over cost for theses 14 crops ranges from 50% to 83%.

The government has also decided to extend repayment date up to August 31 for all short-term loans up to Rs 3 lakh advanced for agriculture and allied activities by banks. Farmers will also get the benefit of interest subvention and prompt repayment incentive.