Union Budget: Nirmala Sitharaman announces Rs.9000 crore for revamped credit-guarantee scheme to MSMEs

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By  India Blooms News Service   Feb 01, 2023

New Delhi: While presenting the Union Budget 2023-24 in Parliament here on Wednesday, Union Minister for Finance and Corporate Affairs Nirmala Sitharaman proposed to continue the financial sector reforms and innovative use of technology which have led to financial inclusion at scale, better and faster service delivery, ease of access to credit and participation in financial markets.

Sitharaman announced that the revamped credit guarantee scheme for MSMEs, proposed in the previous Budget, will take effect from Apr 1 through infusion of Rs. 9000 crore in the corpus.

This will enable additional collateral-free guaranteed credit of Rs. 2 lakh crore. Further, the cost of credit will be reduced by about 1%, she said.

Giving significant relief to MSMEs, the Finance Minister proposed that in cases of failure by MSMEs to execute contracts during the Covid period, 95 per cent of the forfeited amount relating to bid or performance security, will be returned to them by government and government undertakings.

To settle contractual disputes of government and government undertakings, wherein arbitral award is under challenge in a court, a voluntary settlement scheme with standardized terms will be introduced. This will be done by offering graded settlement terms depending on pendency level of the dispute, she said.