MSME Value for Startups - Atmanirbhar Stimulus Package

There is no doubt that the MSMEs are today the precursors of India’s economic growth. Today they are major contributors to the tax base of India. The government has run several developmental avenues for the empowerment and expansion of the MSME sector. It's beyond any doubt that the key for startup founders to access all such avenues is to obtain the Udyog Aadhaar MSME Registration in India. Startups have long been facing a problem of delayed realisation of their bills and receivables, particularly from large corporate buyers and government organisations. Especially in COVID19 times when the need for cash flow for startups is at the highest level hence should get MSMS registered. The Micro, Small and Medium Enterprises Development Act, 2006, MSME SAMADHAAN made provisions to mitigate the problem of delayed payment, whereby any buyer who fails to make payment to MSMEs, as per agreed terms or a maximum of 45 days, would be liable to pay monthly compounded interest at three times the bank rate notified by RBI. State Governments have established Micro and Small Enterprise Facilitation Council (MSEFC) for settlement of disputes on getting references/filing on Delayed payments. Every reference made to MSEFC shall be decided within a period of ninety days from the date of making such a reference as per provisions laid in the Act. Visit for more details.

MSME stands for Micro, Small and Medium Enterprises. In a developing country like India, MSME  industries are the backbone of the economy.

The MSME sector contributes to 45% of India’s Total Industrial Employment, 50% of India’s Total Exports and 95% of all industrial units of the country and more than 6000 types of products are manufactured in these industries (As per When these industries grow, the economy of the country grows as a whole and flourishes. These industries are also known as small-scale industries or SSI’s.

Support for Entrepreneurial and Managerial Development of MSMEs through Incubators  

Any individual or Micro and Small Industries (MSEs) startup that has innovative business ideas at near commercialisation stage can approach the Business Incubators approved under the scheme. Under the scheme, various institutions like Engineering Colleges, Management Institutions, Research labs, etc. that have in-house incubation facilities and faculty for providing handholding support to new ideas/entrepreneurs can apply in the prescribed application form.  The main objective of the scheme is to promote & support untapped creativity of individuals and to promote adoption of latest technologies in manufacturing as well as knowledge based innovative MSMEs. The main objective of the scheme is to promote & support untapped creativity of individuals and to promote adoption of latest technologies in manufacturing as well as knowledge based innovative MSMEs. Visit for more details.

There is no qualification bar to become an incubatee. However, MSME should have valid UdyogAadhar Memorandum (UAM) and individuals should have Aadhar card number.

  1. Financial assistance up to 15 lakh for developing and nurturing an idea.
  2. Financial assistance up to 1.00 Cr. for procurement and installation of Plant and Machines in BI in order to strengthen the technology related R&D activities of BI.
  3. Financial assistance of up to 1.00 Cr. as grants in aid for the seed capital support to HIs/BIs for converting deserving ideas in to start-ups  

Other Benefits

  • MSME registration helps in getting government tenders
  • Under bank loan, 15% import subsidy on fully automatic machinery
  • Becomes easy to get licenses, approvals and registrations, irrespective of field of business
  • Compensation of ISO certificate expenditure
  • Helps in getting low interest rates
  • Registered MSMEs get tariff subsidies and tax and capital subsidies
  • Gets exemption under Direct Tax Laws  
  • Guarantee free and collateral free loans amounting to total Rs. 3.00 Lakh crores have been announced. It is also good that there will be a moratorium of 12 months on payment of Principal with Tenor for 4 years and Scheme can be availed till 31st Oct 2020.
  • In Government procurement, there would be no global tendering upto Rs. 200 crores. This will help domestic companies in general and on the other hand it will also help the MSMEs of the country in particular. 
  • It is mandatory for the Departments of Government of India and the CPSEs (Central Public Sector Enterprises) to pay the receivables to MSMEs within the next 45 days. This will greatly help easing the situation of working capital of the MSMEs.  
  • To generate leads and business E-market linkage for MSMEs to be promoted to act as a replacement for trade fairs and exhibitions. 
  • Fintech will be used to enhance transaction based lending using the data generated by the e-marketplace.   

99% of the startups will fall unders new definition of MSME.

 MUDRA Loan -  Fiscal Incentives

To signify the stage of growth / development and funding needs of the beneficiary micro unit / entrepreneur and also provide a reference point for the next phase of graduation / growth to look forward to, MUDRA offers incentives through these interventions:

  • Shishu : covering loans upto  50,000/-
  • Kishor : covering loans above  50,000/- and upto  5 lakh
  • Tarun : covering loans above  5 lakh and upto  10 lakh

Generally, loans upto  10 lakh issued by banks under Micro Small Enterprises are given without collaterals.  Visit  for more details.

To ease the process of attaining a Mudra Loan, please visit, a 100X.VC portfolio company that automates documentation for attaining loans.

National Portal for Registration of Micro, Small & Medium Enterprises

Udyog Aadhaar is a twelve digit Unique Identification Number provided by the Ministry of Micro, Small and Medium Enterprises, Government of India for small and medium enterprises in India. It is also known as Aadhaar for Business. Udyog Aadhaar scheme was launched in September 2015 by the Ministry of Micro, Small and Medium Enterprises under Micro, Small and Medium Enterprises Development Act, 2006 (MSMED Act, 2006) with the purpose to promote micro, small and medium enterprises. The registration of Udyog Aadhaar is free. Visit for more details on MSME registration.

100X.VC is working with it's portfolio companies to avail the benefits from the Atmanirbhar Bharat Package for MSME. #mentoringunlimited

- Sanjay Mehta

Published on: May 27, 2020