‘Atmanirbhar Bharat Abhiyan – A Solace For MSMEs During Coronavirus Pandemic’

With the aim to make India self-resilient, Prime Minister Narendra Modi recently announced a financial relief package of Rs.20 lakh crore to revive the economy of India from the aftermath of Coronavirus. He laid down the importance of the five pillars of Atmanirbhar India, i.e. economy, technology, infrastructure, demography, and demand. These pillars are going to help India realize growth in years to come.

The nationwide lockdown due to Coronavirus has shaken up the economic sector of the country.  Cash flows have come to a standstill. Although this lockdown is essential for the safety of the citizens, it has adversely impacted the economy, which could prove to be devastating if not tackled properly. At this juncture, this package comes to the rescue for the cottage industries, SMEs, and other industries. It will particularly help  MSMEs in various ways.

Also Read: All You Need To Know About The Distinctions In MSMEs

The Five Pillars of Self-Resilient India

Prime Minister Narendra Modi has envisioned India’s economic growth by highlighting five pillars that can help transform the prevailing situation. They also have the power to shape the growth of the Indian economy moving forward. The Atmanirbhar Bharat Abhiyan is based on these five pillars.

1. Economy

India should be aiming for a quantum leap in economic progress. We should be looking beyond incremental changes.

2. Infrastructure

The second pillar is related to large scale infrastructure development which could become the face of modern India. 

3. Technology

The third pillar is technology.  It has the power to transform traditional operating methods. This can drive the development of India to an all-new level and fulfil the country’s ambitions for the 21st century.

4. Demography

The fourth pillar is the vibrant demography of India which signifies its innate strength. The energy for Atmanirbhar Bharat is found in this pillar.

5. Demand

The fifth pillar of self-resilient India is a demand which is one of the most crucial factors for the economy of any country. The cycle of demand and supply has the potential to affect the economy. PM Modi strongly recommends improving the supply chain to meet the increasing demands that can improve the economic system of the country. For this, we need to strengthen all the stakeholders of the value chain including suppliers, manufacturers, distributors, and the daily wage labourers who bridge the demand-supply gaps.

Also Read: Pros And Cons of MSME Loans In India

About the Coronavirus Relief Package

The Atmanirbhar Bharat Abhiyan package is estimated to be 10% of the GDP of India. The scheme includes automated collateral-free business loans for MSMEs and other industries. It also comprises subordinated debt of rupees 20,000  crores for MSMEs. The MSMEs that are stressed will be relieved under this scheme. The government has declared that the MSME loan taken by MSMEs will have a repayment period of 48 months. These business loans will have no guarantee fee and will have a moratorium period for principal repayment of 12 months. This scheme has a validity period until 31st October 2020. 

This package comes with the futuristic vision to boost the economy and has the potential to benefit 45 lakh MSMEs. This will achieve the target of fulfilling the current needs of the MSMEs in a systematic way.

Also Read: All About Numbers And Targets For MSMEs In India

Revised Investment and Turnover Rates 

There will be an equity infusion of Rs. 50,000  crores for MSMEs with an initial injection of Rs.10,000 crores. The government has developed a fund to support the economy. Eventually, it will enhance the capacity of MSMEs. 

The definition of MSMEs will be redefined. The difference between the manufacturing and service sectors has been abolished. These sectors will have similar investment and turnover rates. Micro units will have an investment of Rs. 1 crore and turnover of Rs. 5 crores. Businesses that will qualify as a small enterprise will have an investment of less than Rs. 10 crores and turnover of up to Rs. 50 crore. Medium units can have an investment of less than Rs. 20 crore with a turnover of up to Rs. 100 crore.

Also Read: MSME Loans: The Optimum Choice For Small Industries

Relief for Non-banking Financial Companies

The government has announced a partial credit guarantee scheme 2.0 of Rs.45,000 crore for NBFCs. The pandemic has led the microfinance companies to face significant losses, and hence this scheme is designed to help them raise finance. The infusion of liquidity of Rs 30,000 crores in the market will support this sector to deal with the crisis. A credit guarantee of 100% will be given to banks and NBFCs. Credit Guarantee Fund Trust for Micro and Small Enterprises will be infused with a total amount of Rs 20,000 crores. It is expected to benefit two lakh MSMEs.

Other Beneficial Proposals of the Scheme

Reserve Bank of India has announced a Rs 50,000 crore scheme to support NABARD, SIDBI and NHB. The bank has offered a moratorium period of three months for interest and installment payments. A relief package of Rs.1500 crore has been allotted for the Mudra loan – Shishu category. There will be a discount of 2% on interest rates for 12 months for the fast recipients. Farmers will get the support of thirty thousand crores from NABARD. The rural banks and co-operative banks will be the chief source for allotment of credit. This scheme is expected to benefit three crore farmers in India. The e-market will act as trade exhibitions for MSMEs during this pandemic.

Also Read: Best Government Business Loan Schemes For MSMEs In India


There are high hopes for this package during this uncertain period. The mission of the hefty relief package from the government is not only to provide temporary relief to the Indian economy. Rather, it is to create a foundation for self-reliant Indian entrepreneurs to come to the forefront of India’s growth story. This package will provide the impetus to small and medium-sized businesses to come up with new products that can fulfill the demand scenario in India. Thus, this will help India to move towards a journey of self-reliance or ‘Atmanirbhar’ and curb the need for imported products.

By indifi

4 thoughts on “Covid-19 Relief Package For MSMEs Under Atmanirbhar Bharat Abhiyan”
  1. I have no money but i want to open small scale industry which invest 25 lakhs only. So, tell me how could i apply for MSME loan?
    Will any margin money be required for opening small scale industry?

  2. I own a small IT firm a private limited company. We are registered with MSME too but when trying to be in touch with our own bank the HDFC bank, they say we have orders to help/ serve only those who had taken loan earlier and not the new ones. While we are having our accounts with them for more than 5 years they speak this kind of discouraging language. In such scenario it seems that Atmanirbhar Bharat remains just a slogan and nothing more. The benefit should reach at the end where we are standing. We do not know where to address so knocking every door. Afraid of being exploited at the same time. Help needed.

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