Budget 2019: What government offered to MSME, unorganised sectors

Union Finance Minister Piyush Goyal on Friday announced a 2 per cent interest subvention for the MSME sector and Rs 3,000 monthly pension for workers in the unorganised sector, both of which were hit hard by the demonetisation.

The 2 per cent interest subvention for loans up to Rs 1 crore can be availed by micro, small and medium enterprises (MSMEs) that are registered with the Goods and Services Tax (GST), Goyal said while presenting the Interim Budget for 2019-20 in the Lok Sabha.

"The government has undertaken many effective steps to strengthen the MSME sector, which provides employment to crores. 

"Recently, a scheme of sanctioning loans up to Rs 1 crore in 59 minutes has been launched. GST-registered SME units will get 2 per cent interest rebate on incremental loan of Rs 1 crore," he said.

The requirement of sourcing from SMEs by government enterprises has been increased to 25 per cent, including three per cent quota for sourcing from women-owned SMEs, he said.

Another section that was hit hard by the demonetisation and the GST-impact on small businesses is the unorganised sector that accounts for half of the country's Gross Domestic Product (GDP) and employs more than 42 crore workers.

Announcing a mega pension scheme for that sector, Goyal said workers in the sector will get a pension of Rs 3,000 per month after retirement in lieu of a minimum monthly payment of Rs 55 or Rs 100, depending on the age at the time of joining the scheme. 

"Our government proposes to launch a mega pension yojna namely 'Pradhan Mantri Shram-Yogi Maandhan' for the unorganised sector workers with monthly income of up to Rs 15,000. 

"This pension scheme shall provide them an assured monthly pension of Rs 3,000 from the age of 60 years," he said.

A worker joining the scheme at 18 years will have to contribute Rs 55 a month, while those above 29 years will have to contribute Rs 100 every month till they turn 60 years old. 

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The government will deposit equal matching share in the pension account of the worker every month. 

Goyal allocated Rs 500 crore for the scheme in the current fiscal.