Prime Minister Narendra Modi on Friday announced sanction of loans of up to Rs 1 crore in 59 minutes, relaxation in labour laws, easier compliance with environmental rules and changes in company laws for small and medium enterprises as a 'Diwali gift' to give a boost to the sector, the country's second-biggest employer.
Announcing a slew of measures for the sector, he said GST-registered micro, small and medium enterprises (MSMEs) will be sanctioned a loan in just 59 minutes through a new portal www.psbloanin59min.com.
Also, GST-registered MSMEs will get a 2 percent subvention or subsidy on a new loan or incremental loan of up to Rs 1 crore, Modi said, adding interest subvention on pre- and post-shipment credit for exports by MSMEs has been increased to 5 percent from 3 percent.
To discuss the impact of these actions, CNBC-TV18 spoke with PK Gupta, managing director, SBI; RK Bakshi, former ED, Bank of Baroda; VG Kannan, chief executive, Indian Banks' Association; Arvind Virman, former chief economic advisor.
Gupta said loans can be sanctioned in 59 minutes with due diligence. “This particular portal looks at three things – one is GST return, then ITR Return and the Bank Statement. So taking all these three together the portal assess the eligibility and the requirement of the loan which get sanctioned in 59 minutes,” he said.
According to Gupta, loans in 59 minutes can be a big gamechanger for MSMEs. "Right now it is limited to Rs 10 lakh to Rs 1 crore, maybe period of time it can go up," he said.
Bakshi said the intent of this programme is very good and now a lot of fintechs have come, which are making digital platforms and digital sanction of loans.
“It is a wise step to integrate the digital capabilities of the country and the infrastructure whether it is in tax reforms or other areas which have been put into place, he said. According to Bakshi, the very big game changer is the availability of GST.
Kannan said it is a big advantage for MSMEs who have not been getting payment on time.
Virmani said it is a great opportunity for labour-intensive exports as of this happens in MSMEs.
With inputs from PTI.