The 2022 budget focuses on ‘digital and technology and areas including infrastructure, health, education, and the supply of e-services to the massive population. The Union Budget 2022-23 also brings several new updates for MSMEs. In this article, you will understand ECLGS Scheme for MSME Registration and other important updates in Union Budget 2022-23 for MSMEs.
What is MSME Registration?
MSME Registration is a government scheme to support Indian Businesses falling into the category of Micro, Small, and Medium Enterprises.
MSME enterprises are the engine of economic growth in a growing country like India. The country’s economy thrives and prospers as these sectors expand. Small-scale industries, or SSI’s, are another name for these businesses.
Hence, the government plans to benefit both the organized and unorganized sectors through the MSME program. Businesses that fall into the eligibility criteria for MSME Registration must register with MSME to avail of several benefits.
The registration with MSME is known as MSME Registration or Udyam Registration.
Understand the MSME Registration Eligibility Criteria
The MSME Registration or Udyam Registration is available to the following businesses:
- Micro MSME enterprises – The enterprises having investments less than Rs. one crore and annual turnover also less than Rs. five crores.
- Small MSME enterprises – These are enterprises whose investment is less than Rs. ten crores and annual turnover is also less than Rs. fifty crores.
- Medium MSME enterprises – These are the enterprises whose investment is less than twenty crores, and annual turnover is less than two hundred crore rupees.
What is the ECLGS Scheme under MSME Registration?
As a result of the coronavirus epidemic, the Emergency Credit Line Guarantee (ECLG) program or scheme has been established to provide financial aid to Indian MSMEs. The following are some of the most notable features of the ECLGS MSME Registration Scheme.
- It is part of the government’s 20 lac crore cash incentive program. India’s economy will benefit from specific incentives for small and impoverished enterprises that have been impacted by the pandemic.
- 3 Lakh crore has been put aside to guarantee that borrowers of bank loans for MSMEs aren’t hampered by the absence of security or collateral.
- The National Credit Guarantee Trustee Company will guarantee the whole loan amount under this program. The government of India owns 100% of this firm.
- Under this government-funded initiative, banks and other lending institutions can provide emergency financing to enterprises with Udyam Registration that have sustained losses as a result of the pandemic or lockdown.
- MSMEs can apply for a business loan without collateral.
- Additionally, The Emergency Credit Line Guarantee Scheme has a low-interest rate, whereas unsecured loans are offered at a cost of 14% p.a.
Latest Update: ECLGS Scheme extension upto next year
An emergency credit line guarantee scheme to help small and medium-sized businesses (SMEs) recover from pandemic losses has been extended until March 31, 2022, as per the previous year’s update – Government extends ECLGS scheme for MSMEs Registration.
However, according to an announcement from Finance Minister Nirmala Sitharaman in the Union Budget 2022, the MSMEs’ eligibility to the Emergency Credit Line Guarantee Scheme (ECLS) has been extended until March 2023 and its guarantee coverage increased by Rs 50,000 crore.
Thus, now the scheme’s total threshold is raised to Rs 5 lakh crore, up from Rs 4.5 lakh crore previously.
Additionally, she claims that ECLGS gave more than 130,00,000 MSMEs the extra credit they desperately needed. As a result, the worst effects of the COVID-19 Crisis have been minimized.
Businesses that specialize in the hospitality and associated services, particularly those run by micro and small businesses, have yet to return to their pre-pandemic levels of commerce. ECLGS will be continued till March 2023, and its guarantee cover will be increased by Rs 50,000 crore to Rs five lakh crore, in light of these considerations.
Other Important Updates to aid MSME Sector in Union Budget 2022
- As per the FM’s budget 2022-23 speech, the government allotted Rs 15,700 crores to the MSME sector, which is more than twice the Rs 7,572 crore granted in the previous year’s budget.
- The four portals( Udyam, e-Shram, National Career Service (NCS), and Aatam nirbhar Skilled Employee Employer Mapping (ASEEM))will be connected together and their scope will be expanded, making it easier for job seekers to find the best fit for their skill sets and employers to find the best match for their workforce needs.
- Websites will now function as platforms with live, dynamic database systems, giving G2C, B2C, and B2B services to consumers and businesses alike.
- In order to standardize the sector and boost entrepreneurship prospects, these services will pertain to credit easing, skill training, and recruiting.
- The CGTMSE (Credit Guarantee Trust for Micro and Small Enterprises) program will be redesigned with additional funding. Employment possibilities would be increased by an extra INR 2 lakh crore as a result of this.
- There would be an INR 6,000 crore investment over five years for the Raising and Accelerating MSME Performance (RAMP) initiative.
- There would be an INR 6,000 crore investment over five years for the Raising and Accelerating MSME Performance (RAMP) initiative. New policies might be launched to benefit small and medium-sized businesses and make them more robust, innovative, and productive.
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