On Friday (November 2, 2018), at an MSME (Micro, Small & Medium Enterprises) event, Prime Minister Narendra Modi announced a sanction of loans up to INR 1 crore in 59 minutes, relaxation in labour laws and easier compliance with environmental rules for small and medium enterprises (SMEs).

GST-registered MSMEs will be sanctioned a loan in just 59 minutes through a new portal. 'PSB Loans in 59 minutes' is an online marketplace, which will enable In-Principle approval for MSME loans up to INR 1 crore in 59 minutes from Public Sector Banks. The platform aims at reducing loan processing turnaround time from 20-25 days to just 59 minutes. Post receiving the in-principle approval letter, the loan is expected to be disbursed in 7-8 working days to the business owner.

A state of the art platform where, the MSME borrower is not required to submit any physical document for In-Principle approval. The solution uses advanced algorithms to analyse data points from various sources such as IT returns, GST data, Bank Statements etc.

Prime Minister Modi said, “Loan requests for up to Rs. 1 crore will be cleared in about the same time it takes for your morning commute.”

The other measures announced include an increase in the share of small and medium industries in government procurement from 20 to 25 per cent. The Prime Minister also announced a 2 per cent interest relief on loans up to INR 1 crore for small businesses that file GST (Goods and Services Tax) returns.

To rid the MSME sector of inspector raj, the Prime Minister announced that the inspection of factories will be sanctioned only through a computerised random allotment and inspectors will have to upload reports on the portal within 48 hours.

Public sector companies, which were mandated to source 20 per cent of their annual procurement from MSMEs, will now be mandated to source at least a quarter of their requirement (25 per cent) from the MSME sector. Additionally, 3 per cent of sourcing by PSUs would have to be done from MSMEs run by women in an attempt to empower women entrepreneurs.

The Prime Minister announced INR 6,000 crore for creation of 20 hubs and 100 tool rooms for technology upgradation.

Further to increase compliance with environmental rules, MSMEs will need single air and water clearance and just one consent to establish a factory.

SMEs form the backbone of the Indian economy and 12 new decisions have been unveiled to aid the MSME sector. "These 12 decisions are not just Diwali gifts for MSMEs but will also herald a new age and new chapter for small enterprises," Prime Minster Modi said to the MSMEs gathered at Delhi's Vigyan Bhawan.