BIS Fee Cuts, RBI-Linked Loans to Boost MSME Sector
New Delhi: The government has rolled out a package of regulatory relaxations, financial incentives and credit reforms for micro, small and medium enterprises (MSMEs) to ensure that the phased implementation of Quality Control Orders does not disrupt domestic production and that credit flows more efficiently to the sector.
At the core of the measures is the phase-wise enforcement of Quality Control Orders through the Bureau of Indian Standards, under which micro enterprises have been granted a six-month extension and small enterprises a three-month extension to comply with notified standards. The orders also exempt imports used by domestic manufacturers for export-oriented production, allow imports of up to 200 units for research and development, and permit clearance of legacy stock manufactured or imported before the orders take effect within six months of implementation.
To reduce compliance costs, the Bureau of Indian Standards (BIS) has introduced steep concessions in its annual minimum marking fees. Micro enterprises receive an 80 per cent reduction, small enterprises 50 per cent and medium enterprises 20 per cent, with an additional 10 per cent concession for women entrepreneur–led units and enterprises located in the North Eastern region. The requirement of maintaining an in-house laboratory has been made optional, allowing firms to use Bureau-recognised or National Accreditation Board for Testing and Calibration Laboratories–accredited facilities, including shared or cluster-based laboratories. Manufacturers have also been given flexibility to define their own control units and levels of control under the Scheme of Inspection and Testing, while certification guidelines and product-wise manuals have been placed in the public domain.
On the lending side, the Reserve Bank of India has advised banks to link loans to micro, small and medium enterprises to an external benchmark, reducing the interest rate reset period to three months. Banks have also been asked to offer existing borrowers the option to switch to the external benchmark–linked interest regime, under mutually agreed terms, to extend the benefits of faster monetary policy transmission.
The government said these steps are complemented by broader credit support measures, including the Mutual Credit Guarantee Scheme for MSMEs, which provides government-backed credit guarantee cover to lenders for term loans of up to ₹100 crore for projects involving the purchase of equipment and machinery. Priority sector lending norms prescribe specific targets for lending to the sector, while scheduled commercial banks are barred from seeking collateral for loans of up to ₹10 lakh extended to micro and small enterprise units. Working capital for such units is required to be computed at a minimum of 20 per cent of projected annual turnover for borrowal limits up to ₹5 crore.
The details were shared by the Minister of State for Micro, Small and Medium Enterprises, Shobha Karandlaje, in a written reply to the Lok Sabha.
– global bihari bureau
