Andhra Pradesh Govt announces Rs 200 crore fund to support MSMEs

Andhra Pradesh Chief Minister YS Jagan Mohan Reddy, on Thursday, conducted a high-level meeting to discuss the present status of the Micro, Small and Medium Enterprises (MSMEs) in the state amid the lockdown. It was found that the MSMEs were the most affected in terms of business. The meeting saw different measures being proposed to provide some relief to the sector. The Andhra Pradesh Government announces Working Capital fund to support MSMEs.

The Andhra Pradesh State Govt firstly waived off the fixed electricity charges in support of MSMEs for three months and cleared 50 percent of all pending industrial incentives of Rs 905 crore in the present month itself. The State Government added that it has decided that the clearing of all the incentives to MSMEs amounting to Rs 905 crore will be done in two phases. While 50 percent of it will be cleared in May, the rest of it will be cleared in June. Further, the waiving off of the electricity charges comes as a relief which was otherwise mandatory to pay irrespective of whether or not they have used electricity or not during the lockdown.

The Andhra Pradesh State Govt has also decided to create a fund of Rs 200 crore to help MSMEs with the working capital. Through this MSME’s can lend loan between Rs. 2 -10 lakhs. The MSMEs would be given these loans without collateral security along with a six-month repayment interval. The AP Government would contribute Rs 25 crore to the fund and the balance amount would be retrieved from SIDBI and other national banks.

Most of the MSMEs in the state have been completely shut following the lockdown while the ones that are functioning are only operating at 25-30 percent in their capacity. Chief Minister Jagan Mohan Reddy further wrote to Prime Minister Narendra Modi requesting the Centre for further funds to support the MSMEs.