Labour, Jobs and Employment – Harmonization of labour laws, gender gap, unemployment, etc.

[pib] PM launches historic Support and Outreach Initiative for MSME Sector


Mains Paper 3: Indian Economy | Planning, mobilization of resources, growth, development and employment

From UPSC perspective, the following things are important:

Prelims level: Various initiatives for supporting MSME Sector

Mains level: Facilitating MSMEs in India



  1. Hon’ble PM has launched a historic support and outreach programme for the Micro, Small and Medium Enterprises (MSME) sector.
  2. As part of this programme, the Prime Minister unveiled 12 key initiatives which will help the growth, expansion and facilitation of MSMEs across the country.

Five key aspects for facilitating the MSME sector

  • Access to credit,
  • Access to market
  • Technology upgradation
  • Ease of doing business and
  • Security for employees

Key Initiatives

Access to Credit

  1. 59 minute loan portal
  • Loans upto Rs. 1 crore can be granted in-principle approval through this portal, in just 59 minutes.
  • This portal will be made available through the GST portal.
  • 2 percent interest subvention for all GST registered MSMEs, on fresh or incremental loans.
  1. TReDS compliance
  • All companies with a turnover more than Rs. 500 crore, must now compulsorily be brought on the Trade Receivables e-Discounting System (TReDS).
  • Joining this portal will enable entrepreneurs to access credit from banks, based on their upcoming receivables.
  • This will resolve their problems of cash cycle.

Access to Markets

  1. The public sector companies have now been asked to compulsorily procure 25 percent, instead of 20 percent of their total purchases, from MSMEs.
  2. Out of the 25 percent procurement mandated from MSMEs, 3 percent must now be reserved for women entrepreneurs.
  3. He said transactions worth more than Rs. 14,000 crore have been made so far through GeM (Govt. E Market).
  4. All public sector undertakings of the Union Government must now compulsorily be a part of GeM.

Technology Upgradation

  1. PM announced establishment of tool rooms across the country as they are a vital part of product design.
  2. 20 hubs will be formed across the country, and 100 spokes in the form of tool rooms will be established.

Ease of Doing Business

  1. Clusters will be formed of pharma MSMEs and 70 percent cost of establishing these clusters will be borne by the Union Government.
  2. The announcement focused on simplification of government procedures. The return under 8 labour laws and 10 Union regulations must now be filed only once a year.
  3. As part of establishing a unit, an entrepreneur needs two clearances namely to establish.
  4. The Environmental clearance and consent under air pollution and water pollution laws have been merged as a single consent and self certifications.
  5. For minor violations under the Companies Act, the entrepreneur will no longer have to approach the Courts, but can correct them through simple procedures
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