How Atmanirbhar Bharat Abhiyan Benefits Small Businesses

What is Atmanirbhar Bharat Abhiyan?

As the word suggests, Atmanirbhar Bharat Abhiyan is a scheme that focuses on developing a self-reliant India, supporting the Indian economy in times of crisis. This scheme was announced as an economic package of Rs.20 lakh crores. This scheme emphasizes on five components economy, demand, infrastructure, systems, and vibrant demography.

---

What are the Objectives of Atmanirbhar Bharat Abhiyan?

The Aatmanirbhar Bharat Abhiyan aims to help India recover from the economic impact of COVID-19 while promoting self-reliance among its citizens. If you’re wondering about its expected outcomes, here are its key objectives:

• Support local manufacturers and service providers to foster a self-reliant economy.
• Improve living standards by addressing the trade deficit and maintaining fiscal balance.
• Revive all sectors of the economy through increased fiscal stimulus.
• Strengthen self-reliance by focusing on land, labor, liquidity, and legal reforms.
• Allocate economic packages worth 10% of India’s GDP.
• Provide special incentives and financial support to small businesses and farmers affected by COVID-19.

---

What are the Five Pillars of Atmanirbhar Bharat Abhiyan?

Atmanirbhar Bharat Abhiyan, the self-reliant India mission is based on these five pillars -

• Economy
  This pillar focuses on strengthening the economy by supporting various sectors, improving infrastructure, and simplifying business operations. The reforms aim to enhance India’s competitiveness and resilience.
• Infrastructure
  This pillar emphasizes nationwide infrastructure development to improve connectivity, streamline logistics, and drive industrial growth. These investments fuel economic activity and create jobs.
• System
  It works on improving governance by reforming taxation, labor laws, and regulatory frameworks to make them more efficient and business-friendly.
• Vibrant Demography
  By investing in skills, education, and job opportunities, we can harness the potential of our large population and turn it into a driving force for growth.
• Demand
  This pillar focuses on increasing people’s purchasing power and stimulating domestic consumption by strengthening demand.

---

What are the Features of Atmanirbhar Bharat Abhiyan?

While the AatmaNirbhar Bharat Abhiyan focuses on making India self-reliant, it also includes several other initiatives. Achieving self-sufficiency is a long and complex process, and understanding these supporting activities will give a clearer picture of the scheme’s impact.

Businesses and MSMEs

The scheme benefits businesses, including cottage industries, MSMEs, laborers, and the middle class. The ₹1.70 lakh crore Pradhan Mantri Garib Kalyan Package provided relief to the poor during COVID-19. Key measures include extending ITR and GST filing deadlines and ensuring round-the-clock customs clearance. MSMEs can access business loans of up to ₹25 crores for outstanding credit and ₹100 crores in turnover.

Support for the Poor and Backward Classes

• Agricultural Loans: ₹4.22 lakh crores provided to three crore farmers.
• Healthcare Insurance: ₹50 lakh coverage for healthcare workers.
• Food Support: 80 crore people received 5 kg of wheat or rice per month for three months.
• Financial Aid: Jan Dhan accounts for 20 crore women, free gas cylinders for 8 crore families, and a 75% non-refundable advance on EPF.
• Shelter for Migrants: State Governments use the State Disaster Response Fund (SDRF) to build shelters and provide essentials.
• Labor and Housing Support: Minimum wages now cover 30% of rural laborers, and Affordable Rental Housing Complexes (ARHCs) support migrants and urban low-income families.

Agricultural Reforms

• Financial Assistance: NABARD provides ₹30,000 crores in emergency working capital for farmers.
• PM KISAN Fund: Disbursed ₹18,700 crores to farmers.
• Infrastructure Investment: ₹1 lakh crore allocated for farm-gate infrastructure.
• Micro Food Enterprises (MFE): ₹10,000 crore scheme to formalize small food businesses.
• Fisheries Support: ₹20,000 crores allocated under Pradhan Mantri Matsya Sampada Yojana (PMMSY).

Industrial and Economic Growth

• Infrastructure Development: The Industrial Land Bank was created to attract new investments.
• Coal Sector Reforms: Shifted to a revenue-sharing model and invested ₹50,000 crores in diversified coal opportunities.
• Mineral Sector Growth: Private investments encouraged for seamless mining and production operations.

Government Reforms

• Corporate Law Improvements: Achieved a 44% recovery in 221 resolved business cases.
• Educational Support: SWAYAM PRABHA DTH channels assist those without internet access.
• Digital Learning: PM eVIDYA provides multi-mode digital and online education.

Startup Support and Entrepreneurship Promotion

• Financial Assistance: Startups benefit from tax breaks, a business-friendly environment, and access to venture capital.
• Fund of Funds for Startups (FFS): Government-backed funding supports startups in sectors like biotechnology and agriculture.

Education and Skill Development

• National Education Policy (NEP) 2020: Focuses on curriculum reform, vocational training, and research innovation.
• Skill India Mission: Provides workforce training to match evolving job market needs.

---

What are the Benefits of Atmanirbhar Bharat Abhiyan for MSMEs?

Atmanirbhar Bharat Abhiyan brings about significant benefits for Indian MSMEs. Given below are some major benefits of Atmanirbhar Bharat Abhiyan for MSMEs -

Revised Limits for MSME Classification

Earlier, the MSME classification was based on the criteria of investment in plant and machinery. The lower limits were suppressing the growth of these MSMEs. With this scheme, the government increased the limits to classify businesses as MSMEs, thus supporting their economic growth and operations.

Emergency Credit Line to MSMEs

Almost all MSMEs were badly hit by the Covid-19 pandemic and were in need of additional funding to resume their operations and purchase raw materials. An emergency credit line of Rs. 3 lakh crore was made available to the businesses and MSMEs.

• This scheme provides a collateral free automatic loan with no guarantee fee and no requirement of fresh collateral.
• The limit for credit line is 20% of the entire outstanding credit.
• Businesses having outstanding borrowings upto Rs.25 crore and turnover upto Rs.100 crore can avail this scheme.
• The tenure of loan is four years and comes with a moratorium period of 12 months on principal repayment at a specified interest rate.
• The government extended 100% credit guarantee to banks and NBFCs on principal and interest.

Debt for Stressed MSMEs

NPAs or stressed MSMEs needed equity support to revive their businesses. The Central Government provided Rs.20,000 crores as subordinate debt. Subordinated debt refers to a loan owed to an unsecured creditor, which is repaid only after settling the claims of secured creditors during liquidation.

Under this scheme, the government will provide ₹4,000 crore to the Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE). CGTMSE will then offer partial credit guarantees to banks, enabling them to extend debt to MSME promoters. These promoters will reinvest the funds as equity in their businesses.

This capital infusion will ease financial pressure on MSMEs, accelerating their recovery. The scheme is expected to benefit around two lakh MSMEs.

To implement this scheme, the government extended a support of Rs.4,000 crores to Credit Guarantee Funds Trust for Micro, Small and Medium Enterprises (CGTMSE). It also provides partial credit guarantee support to banks, benefitting about two lakh MSMEs.

Equity infusion for MSMEs

MSMEs were facing a severe shortage of equity. Therefore, the government set up a Fund of Funds (FoFs), having a corpus of Rs.10,000 crores. MSMEs with high growth potential were identified and provided equity funding.

Limiting Global Tenders

In case of global tender for commercial procurement, indian MSMEs were not able to survive due to unfair competition from foreign companies. To support Indian MSMEs, the government disallowed global tenders in government procurement tenders upto Rs.200 crores.

Other measures

• To support MSMEs during the pandemic, an e-market linkage will replace traditional trade fairs and exhibitions, helping businesses overcome marketing challenges.
• Fintech solutions will be leveraged for transaction-based lending, using data from the e-marketplace to enhance credit access.
• Additionally, MSME receivables from the government and Central Public Sector Enterprises will be cleared within 45 days, ensuring better liquidity and smoother business operations.

---