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Reform, liquidity measures for MSMEs get Cabinet nod

Further, the Rs 50,000 crore ”fund of funds” for MSMEs was also cleared by the CCEA which would help these entities get equity.

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Nirmala Sitharaman

New Delhi, June 1 : The Union Cabinet on Monday gave a green signal to the reform and liquidity measures announced by Finance Minister Nirmala Sitharaman under the ”Aatmanirbhar Bharat economic package last month.

Apart from approving the distressed asset fund for MSMEs and the Rs 50,000 crore fund of funds, the Cabinet also widened the definition of MSMEs by allowing more entities into the criteria to avail the benefits.

Further widening the definition of micro, small and medium enterprises (MSMEs), the Cabinet Committee on Economic Affairs (CCEA) decided that manufacturing and service units with turnover of up to Rs 250 crore or investment of up to Rs 50 crore will qualify as medium enterprises.

Addressing the media here post the Cabinet meeting, Union Information & Broadcasting Minister Prakash Javadekar said that the decision was taken post suggestions coming in after the government announced broadening of the scope of MSMEs to support more businesses.

Also, the turnover criteria for MSMEs will not include revenue from exports, further providing flexibility to the sector to expand their operations and push overseas sales, he said.

On May 13, Sitharaman hd announced an increase of investment limits for MSMEs. The Centre had raised the medium enterprises” definition to one with investment and machinery to the tune of Rs 20 crore and turnover of Rs 100 crore. This stands further enhanced now after the Cabinet decision.

As per the new changes, businesses with investment of less than Rs 1 crore and turnover of Rs 5 crore would be classified as micro enterprises. Under the existing criteria, a company with investment of less than Rs 25 lakh in the manufacturing sector and less than Rs 10 lakh in the services sector were considered as micro enterprises.

The Cabinet has changed this distinction as well and a unified criterion will be applied for micro enterprises now.

The investment limit of small enterprises has been increased to Rs 10 crore, and the companies would have to have a turnover of less than Rs 50 crore.

Further, the investment limit for medium enterprises has been increased to Rs 20 crore and the turnover limit has been kept at Rs 100 crore, which has now been extended to companies with investment of Rs 50 crore and turnover of up to Rs 250 crore.

Under the ”Aatmanirbhar Bharat” package, the government has also done away with the distinction of services and manufacturing MSMEs.

Further, the investment limit for medium enterprises has been increased to Rs 20 crore and the turnover limit has been kept at Rs 100 crore, which has now been extended to companies with investment of Rs 50 crore and turnover of up to Rs 250 crore.

The CCEA also approved a distressed asset fund for MSMEs to facilitate provision of Rs 20,000 crore as subordinate debt as announced under the economic package.

The government”s contribution to the distressed asset fund is Rs 4,000 crore through its investment in the Credit Guarantee Trust for Micro and Small Enterprises (CGTMSE) set up by it along with Sidbi. The CGTMSE, in turn, provides partial credit guarantee to the banks.

Functioning MSMEs, which have become non-performing assets or are stressed, will be eligible for access to the fund.

Under the scheme, the Centre will provide guarantee coverage of up to 85 per cent for loans up to Rs 5 lakh and 75 per cent for loans beyond Rs 5 lakh to MSMEs from financial institutions.

It provides a debt facility of up to 15 per cent of promoter contribution or Rs 75 lakh to the promoters, who, in turn, will infuse the amount in the MSME unit as equity.

According to the government, around 2 lakh MSMEs will be benefited by the move.

Further, the Rs 50,000 crore ”fund of funds” for MSMEs was also cleared by the CCEA which would help these entities get equity.

The fund of funds will be set up with a corpus of Rs 10,000 crore and provide equity funding for MSMEs. It will be operated through a mother fund and a few daughter funds and its structure will help leverage Rs 50,000 crore of funds at the daughter funds level.

It will also help MSMEs get listed on the main board of stock exchanges.

An official statement said that MSMEs are the backbone of the Indian economy and silently operating in different areas across the country, more than 6 crore MSMEs have a crucial role to play in building a stronger and self-reliant India.

These small economic engines have a huge impact on the country”s GDP, making a contribution of 29 per cent. They contribute to almost half of exports from the country and over 11 crore people are employed in the MSME sector.

“The MSME Ministry is committed to support the MSMEs, and the people who depend on them. All efforts are being made to encourage MSMEs to take benefit of the initiatives under the ”Aatmanirbhar Bharat” package and our other schemes,” said the official statement.

Among the other steps taken amid the novel coronavirus pandemic, the government has laid out several schemes to provide immediate relief to the MSME sector, including Rs 3 lakh crore collateral-free automatic loans for MSMEs to meet operational liabilities, buy raw material and restart businesses.

The government has also disallowed global tenders in procurements of up to Rs 200 crore to create more opportunities for domestic players.

–IANS

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Sagging electoral prospects behind Trump’s H-1B action

The real impact of the presidential proclamation, therefore, will be two-fold. First, as long as Trump is President, it will undoubtedly cause many international students, who are looking at the US as a potential destination for higher studies to reconsider their decisions.

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On June 22, US President Donald Trump issued an executive order suspending the entry of a number of non-immigrant work visa holders into the US till the end of the year. The visa categories affected include, most notably, H-1B, which has been used by more than a million Indian information technology professionals since the 1990s and L1 visa used by US companies to bring in workers from their Indian offices.

During his campaign for President four years ago, candidate Trump consistently railed against the H-1B programme. However, after he moved into the White House, Trump left the visa programme untouched in the first 43 months of his presidency, even as he delivered on most of his controversial campaign promises, such as the Muslim ban and dumping of multilateral treaties like NAFTA and Paris Agreement, through executive actions.

There were two compelling reasons Trump didn”t act on the visa programme until now. The US economy had been doing very well until Coronavirus hit the American shores early this year. And, the tech industry, which employs three-fourths of the H-1B visa holders, has been doing even better.

The second reason is the formidable lobbying power of the industry. The four most valuable companies in the world, Amazon, Google, Apple and Microsoft, and Facebook have historically used the H-1B workforce to augment their profits. They were not going to let it go without a fight.

The influence these organizations wield was evident when Trump spared H-1B in his first executive order to curb nonimmigrant work visa holders issued on April 22. According to reports, H-1B was to be part of that proclamation but the White House was talked out of it by the industry.

So, what has changed between late April and today?

A number of things, but primarily it is Trump”s dimming re-election prospects. A steady stream of polls in the past few weeks has shown that the incumbent is trailing badly in the race against presumptive Democratic nominee Joe Biden. The President”s handling of the Covid-19 pandemic — his initial refusal to see it as a threat and then his inability to provide the leadership to contain it — has shaken people”s confidence in Trump”s presidency.

Prior to the onset of the Coronavirus, Trump was banking on making the election a referendum on his stewardship of the economy. But the pandemic, which has claimed more than 125,000 American lives, has also eliminated up to 40 million jobs.

Although some of the jobs have come back thanks to the multitrillion dollar stimulus package, the re-opening plans promoted by Trump have not produced substantial results. Now, with parts of the country closing down again, and the deadly virus spreading in southern and western states, there”s no sign of the economy turning the corner before the November election.

Consequently, Trump needs to be seen as doing something to save the economy and American jobs. H-1B, which has been a bogeyman for the protectionists and economic nationalists, is an easy target during this downturn, even though study after study has documented that the visa programme actually helps create jobs. The administration claims that the executive order is going to save more than half a million American jobs without giving details.

It should be noted that the order mainly impacts petitioners who are outside of the US who have not gotten their visas stamped on their passports yet. As a result, it will only have little impact in the short term on those seeking work in the US.

The US Citizenship and Immigration Service issues roughly 85,000 new H-1B visas annually of which 20,000 are for those with US master”s degrees. Most petitioners in this category are already in the US and they will not have any problem in starting their jobs in October, typically the time new visa holders enter the work force.

According to immigration attorneys, a significant percentage of the remaining 65,000 visas are claimed by dependents of H-1B and L-1 visa holders, as well as foreign students who have graduated from US schools, but did not get the visa under the master”s degree quota. These groups will also not come under the purview of the executive order, as they are already in the country.

The real impact of the presidential proclamation, therefore, will be two-fold. First, as long as Trump is President, it will undoubtedly cause many international students, who are looking at the US as a potential destination for higher studies to reconsider their decisions. During the Trump era, the US has already been losing potential students to nations such as Canada, Britain and Australia.

Second, despite the massive job losses in the broader economy, there are still vacancies in the tech industry that will have to be filled to move its economy forward. The US tech sector has said for years that the country doesn”t produce enough skilled workers and the industry will suffer without the intake of manpower through H-1B and L1 visa programmes. If it becomes more difficult for these companies to hire foreign workers, they would probably outsource more and more of these jobs to foreign destinations, including India.

It is an irony that, while Trump is trying to bring manufacturing jobs back to the US, his nonimmigrant worker visa policy could force more high-paying service jobs offshore. What makes it doubly ironic is that this action which Trump has taken to try to save his job as President will not do so.

Given the current state of affairs, it is likely that on election day November 4, the American people will fire Donald Trump. After that, the decision on what to do with information technology visas in 2021 and going forward will be in someone else”s hands. And, Trump will have to find a new place of employment for himself.

The good news is Biden has already stated that his administration will lift the H-1B ban.

(Frank F. Islam is an entrepreneur, civic and thought leader based in Washington DC. The views expressed are personal)

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Corona impact: CAIT demands de-sealing of Delhi shops

According to CAIT National Secretary General Praveen Khandelwal, estimates show that about 6,000 shops have been sealed in Delhi.

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DELHI LOCKDOWN

New Delhi, July 4 : The Confederation of All India Traders (CAIT) on Saturday demanded that shops in Delhi be de-sealed immediately without further delay.

Accordingly, in a letter to the Union Urban Development Minister Hardeep Singh Puri, CAIT demanded that “Delhi sealed shops should now be de -sealed immediately without further delay”.

Besides, the traders’ body also called for the finalisation of Delhi Rent Act, “ending a long running dispute between the land lords and tenants in Delhi”.

Furthermore, CAIT demanded that traders should be allowed to participate in the consultation process of Master Plan 2041 which is being prepared for Delhi.

According to CAIT National Secretary General Praveen Khandelwal, estimates show that about 6,000 shops have been sealed in Delhi.

“Corona started since the beginning of the year 2020 and the traders of Delhi are faced with a big crisis of livelihood and in such a situation, it has become imperative that shops are immediately de-sealed,” he was quoted as saying in a statement.

“Keeping this in view, the Central government should take an initiative in this matter and pass an ordinance in which all sealed shops should be opened and all other problems related to sealing should be postponed for the time being thereby giving all traders a fair chance to do business.”

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Congress to PM Modi: Roll back imposition of tax on disability pension of defence forces

He cited that 20 Indian soldiers including commanding officer also had attained martyrdom on the fateful night of June 15. He insisted that some of them, god forbids, may also be disabled.

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adhir ranjan chowdhury congress

New Delhi, July 5 : Leader of Congress party in the Lok Sabha, Adhir Ranjan Chowdhury, has written to Prime Minister Narendra Modi seeking a review and roll back the decision of the imposition of tax on disability pension of defence forces including Army, Navy, and Air Forces.

“I must appreciate your visit to the army hospital (crisis expansion capacity of 100 beds) at Leh where scores of Indian soldiers have been admitted who have sustained grievous injuries during their valiant fight against Chinese intruders at Galwan Valley,” said Chowdhury in a letter to the PM.

He cited that 20 Indian soldiers including commanding officer also had attained martyrdom on the fateful night of June 15. He insisted that some of them, god forbids, may also be disabled.

“In future how would those disabled army personals earn and run the livelihoods? Disability pension comes as succour to those brave soldiers,” he added in the letter.

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