News

AP to help revive MSMEs with ₹1,110-cr ‘ReSTART’ package

V Rishi Kumar Hyderabad | Updated on May 22, 2020 Published on May 22, 2020

Sets up task force to attract investments

Factoring the hardships faced by the MSMEs during the Covid-19 pandemic, the Andhra Pradesh government has come up with a ₹1,110-crore ‘ReSTART’ policy boost.

This is to provide some relief at a time when the economy has come to a standstill, severely affecting the livelihoods of hundreds of thousands dependent on MSME sector. In Andhra Pradesh alone, around one lakh MSMEs provide employment to more than 10 lakh people.

State Chief Minister YS Jagan Mohan Reddy has been monitoring the situation and the government has been in direct communication with industry associations to understand and assess the situation. Based on the requests from various quarters of the industry sectors, the government has formulated a policy to support MSMEs financially and accelerate the economic restart.

The ReSTART package includes the payment of all sanctioned but outstanding incentives to MSME units, waiver of three months fixed demand charges, deferment of power minimum demand charges for three months for large and mega units, and working capital loans along with preferential market access.

The ReSTART Policy will include the release of ₹905 crore of pending incentives to MSME units in two months, waive fixed demand charges towards power for a period of three months from April 20 to June 20 for MSMEs (₹188 crore) and provide ₹200-crore working capital loans by creating a fund to meet their liquidity crisis, according to Subramanyam Javvadi, Director, Industries & Commerce Department and CEO, Andhra Pradesh Economic Development Board.

In addition, it has proposed to defer the payment of fixed power demand charges of ₹17 crore for the same period to all large and mega industries without interest or penal charges

The MSMEs Preferential Market Access Policy will ensure that 25 per cent of government purchases will be from Micro and small units covering about 364 items.

Task force

The government has also constituted a task force with Industries Minister Mekapati Goutham Reddy as chairman to attract investments into the State.

This comes in the backdrop of the Covid-19 pandemic pushing some countries to consider new locations, particularly company units located in China considering relocation.

Published on May 22, 2020

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