MSMEs & Transport Striding Towards Growth : Nitin Gadkari

Due to lockdowns imposed to prevent transmission of the Coronavirus, small businesses suffered huge losses and the transport sector has come to a halt. However, with relaxations from the Ministry of Home Affairs industries have started rev their engines again. To know about how the MSMEs and the transport sector is moving ahead towards growth and development, Arpit Gupta and Adarsh Som interacted with Nitin Gadkari, Minister for Road Transport and Highways (MoRTH) and Minister for Micro, Small and Medium Enterprises (MSMEs) in an exclusive interview for the eGov Magazine.

Q. How has Atma Nirbhar Bharat Abhiyan’s stimulus fund supported the roads and highways sector and MSMEs in regaining normalcy ?

Under the Atma Nirbhar Bharat Abhiyan’s stimulus fund, RBI has supported all infrastructure projects by giving moratorium against all loan payments due in COVID period. Besides RBI’s support, the Ministry of Road Transport and Highways has extended the following support:

• All road agencies will now be providing up to six months extension to contractors without any costs which will be covering construction work as well as goods and services contracts.
• Partial release of bank guarantees to the extent of partially completed contracts.
• Compensation of toll loss for the period for which the toll collection was suspended.
• It has been observed that the toll collection has significantly decreased which has led to cash flow issues in many projects. National Highways Authority of India (NHAI) has rolled out a policy for extending cash support in the form of COVID loan at a lower interest rate to help concessionaires.
• One-time dispensation for toll revision of concessions signed before 2008 to be undertaken on the basis of WPI prevailing in December rather than March. As WPI for March was very low because of prevailing conditions in the country.

As per the relief measures provided by MoRTH under Atma Nirbhar Bharat, all-out efforts were made to extend all possible help to Contractors, Concessionaires and developers of Road Sectors by way of Time Extensions (3–6 months), relaxation in Contract provisions for ensuring cash flow, direct payment to subcontractors and release of retention money to augment cash flow, waiver of penalty in case of delay in submission of Performance Security (for new Contracts), and compensation of toll loss.

Availability, as well as the cost of credit, has been one of the perennial problems of this sector. MSME Sector survives on a very thin margin. The recently announced measures (i) Emergency Credit Line Guarantee Scheme ( ECLGS), (ii) Distressed Asset Fund — Subordinated Debt for Stressed MSMEs (iii) Fund of Funds will help this sector in its pursuit towards mobilisation of funds both as Debt as well as Equity.

Definition: This Ministry, vide notification no. S.O.2119 (E) dated June 26, 2020, has notified composite criteria of classification of MSMEs based on investment in plant & Machinery/equipment and turnover of MSMEs. The new classification has come into effect from July 1, 2020.

Any person who intends to establish a micro, small or medium enterprise may file Udyam Registration online in the Udyam Registration portal, based on self-declaration with no requirement to upload documents, papers, certificates or proof. On registration, an enterprise (referred to as “Udyam” in the Udyam Registration portal) will be assigned a permanent identification number to be known as “Udyam Registration Number”. An e-certificate, namely, “Udyam Registration Certificate” shall be issued on completion of the registration process. The total new registration is 33051 as on date.

With the change in criteria of classification of MSMEs, Enterprises with an investment of up to Rs 50 crore and turnover of up to Rs 250 crore will now be termed as medium enterprises, investment of up to Rs 10 crore and turnover of up to Rs 50 crore will be termed as small enterprises and investment up to Rs 1 crore and turnover up to Rs 5 crore as micro-enterprises.

Under Atma Nirbhar Bharat Abhiyan’s stimulus fund for government procurement, tenders up to Rs 200 crore will not be regarded as global tender. Earlier, a majority of MSMEs were unable to match the requirements due to the tender being global. With this change in classification criteria, MSMEs could now be able to participate in Government/ Highways related Tenders, which will help the MSMEs to grow their business and help MSME sector to come to normalcy faster.

Change in classification criteria will help firms increase their capacity without losing the benefits of being a small unit.

Delayed payment: On delayed payment, the matter has already been pursued with DPE and other Departments at Secretary level through D.O. Letter dated 18.05.2020. The Samadhaan data as below shows that the cases of delayed payments against central government departments /CPSEs /State Govt/Central Ministries have been mutually Settled/ disposed of in a speedy manner.

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