Micro, Small, and Medium Enterprises (MSMEs) act as the growth engine of the Indian economy by contributing 30% of the country's GDP. In recent years, India has also witnessed a surge in the number of MSMEs, increasing its growth potential and providing employment opportunities to the 11 crore population. MSMEs drive innovation and inclusive growth and are the backbone of transforming the Prime Minister's dream of 'Make in India' into reality.
MSMEs have a lower capital-output ratio as they do not require huge capital investment but manufacture thousands of products. But one of the significant challenges MSMEs face is access to credit, which hampers their growth and development. They do not have adequate financial resources to purchase land, plant, and machinery or invest in research and future growth, which restricts their productivity and thus impacts their overall profitability. To address this issue, the government has introduced various MSME subsidy schemes to bridge the credit divide they face.
Hidden Opportunities – MSME Subsidy Schemes
To boost the growth of MSMEs in the country, the government is actively assisting the enterprises through various MSME subsidy schemes. The state of Haryana has been divided into four blocks – A block includes Ambala, Gurugram, Bahadurgarh, and Panipat, for which no subsidy is provided. B block includes Pataudi, Sohna, Hissar, and Jhajjar, for which much subsidy support is available. For C and D blocks, which include areas like Bhiwani, Jind, Fatehabad, Gohana, Loharu, Panchkula, and Mahendergarh, heavy subsidies are provided for further development of these areas. Haryana government schemes for MSMEs include Investment subsidy - 50% reimbursement of Net SGST for the first five years and 25% for the next three years in B block. Interest Subsidy of 5% is also provided to Micro and Small Enterprises on term loans with a maximum of up to INR 20.00 lakh per year for five years in 'C' and 'D' Categories Blocks.
Uttar Pradesh government also provides capital subsidy up to 4 crores per unit to save MSMEs from financial crunch. Not just state governments but central government schemes for MSME have also been launched for their upliftment like 2nd loan for up-gradation of the existing PMEGP/MUDRA units, Scheme of Fund for Regeneration of Traditional Industries (SFURTI), Procurement and Marketing Support scheme and many more. Such government schemes for MSMEs make the loans affordable with lower interest rates and reduce their capital cost burden.
Subsidies make the project financially viable by reducing capital expenditure. For example, suppose you plan to expand your business in the region of Bundelkhand, Uttar Pradesh, and you were not aware of the capital subsidy available under the MSME subsidy scheme of Uttar Pradesh. Thus, you incur the whole capital expenditure of INR 35 crore out of your pocket.
But if you have been aware of this policy and availed the benefit under this government scheme for MSMEs, you would have become eligible for Capital subsidy of 15% as a medium enterprise up to 4 crore. 15% of INR 35 crore makes more than five crore, but INR 4 crore being the ceiling limit under the scheme, you could secure INR 4 crore from the government, which is not a petty amount.
Similarly, suppose any organization plans to purchase testing equipment in Haryana. In that case, the government assists you by providing 50% of the cost up to 20 lakhs if you meet the eligibility criteria, get all the clearances, possess all the documents required and know where and how to apply. Therefore, most companies need to be made aware of these government schemes for MSMEs and the formalities leading to the emergence of subsidy consultants.
Game Changing Impact of Subsidy Consultants
The government's proactive role in supporting MSMEs should have decreased the financial stress of such enterprises, but unfortunately, that's not the case in India. Various government schemes for MSMEs are being implemented, but the scenario of MSMEs has stayed the same.
MSMEs need to learn how to navigate this complex world of subsidies and need to be more knowledgeable about subsidies. Most of the time, MSMEs are not even aware of the existence of this financial assistance provided by the government. Thus, subsidy consultants come to the forefront, and they lighten the dark and complicated path of getting subsidies from the government. The role of subsidy consultants includes creating awareness about available MSME subsidy schemes and helping the companies with proper application and documentation till they get disbursement of subsidies in their hands.
It takes time for enterprises to figure out whether they meet the eligibility criteria and what type of clearances are required before applying for subsidies. The professional approach of subsidy consultants, with their expertise across the domain, makes the process of availing subsidies smoother. They know about the latest government schemes and the eligibility criteria for application.
Subsidypro – Best Among Subsidy Consultants
India's leading subsidy consultancy firm, SubsidyPro, has years of experience in government schemes for MSMEs. Even if companies are aware of MSME subsidy schemes, there is still a vast difference between theoretical and practical applications. Engaging with the government for subsidies calls for a more professional and systematic approach, which is where the role of SubsidyPro comes in. As a trusted advisor and execution partner, it assists companies in navigating through the rigorous and complex world of MSME subsidy schemes with ease. SubsidyPro is dedicated to an outcome-oriented approach and ensures proper compliance and accuracy of the application, guiding you throughout the whole process.
Bridging the credit divide for MSMEs in India requires a multi-faceted approach, including government initiatives, subsidy schemes and expert guidance from consultants. SubsidyPro addresses the challenges in benefitting MSME subsidy schemes with comprehensive guidance, including enhanced awareness campaigns, streamlined application procedures, and increased transparency to ensure that subsidies reach those who need them. In the market of subsidy consultants - SubsidyPro is your trusted advisor in unlocking the financial benefits that can fuel your success.
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