To strengthen MSMEs Union Cabinet approves Rs 50,000 crore equity infusion
The Union Cabinet on Monday approved Rs 50,000 crore equity infusion for micro small and medium enterprises (MSMEs) through Fund of Funds, and another Rs 20,000 crore fund for the distressed sector
New Delhi: The Union Cabinet on June 1 approved Rs 50,000 crore equity infusion for MSMEs to strengthen their growth potential.
The government also approved Rs 20,000 crore subordinate debt for stressed MSMEs.
Union minister Prakash Javadekar said the decision on equity infusion will also enable micro, small and medium enterprises (MSMEs) to get listed on stock exchanges.
A fund of funds with corpus of Rs 10,000 will be set up. The fund of funds will be operated through mother fund and few daughter funds.
The fund structure will help leverage Rs 50,000 crore of funds at daughter funds level.
The subordinate debt for stressed MSMEs is likely to benefit 2 lakh stressed MSMEs.
Meanwhile, the government further amended the definition of MSME. Turnover limit for medium enterprises has been revised upward to Rs 250 crore (from Rs 100 crore as announced earlier).