1.

Bank Loans (Collateral Free)

The Government of India has made collateral-free credit available to all small and micro business
sectors. This initiative guarantees funds to micro and small sector enterprises. Under this scheme,
both the old as well as the new enterprises can claim the benefits. A trust named The Credit
Guarantee Trust Fund Scheme was introduced by the Government of India, SIDBI (Small Industries
Development Bank of India) and the Ministry of Micro, Small and Medium Enterprise to make sure
this scheme is implemented (Credit Guarantee Scheme) for all Micro and Small Enterprises.

2. Subsidy on Patent Registration

Under the current laws MSMEs registered with the MSME ministry stand to benefit a 50% subsidy
on their patent registration fees. This encourages small businesses and firms to keep innovating
and working on new projects and technologies. The subsidy can be availed by submitting an
application at the respective ministries.

3. Overdraft Interest Rate Exemption

Businesses and enterprises registered as MSMEs can avail a benefit of 1% on the Overdraft in a
scheme that differs from bank to bank. This helps making small business secure during
unfavourable markets.

4. Industrial Promotion Subsidy Eligibility

Businesses that have been registered as MSMEs are eligible for subsidies for Industrial Promotion
as provided by the Government.

5. Protection against Payments (Delayed Payments)

MSMEs constantly face the risk of delayed payments which in turn disturbs their entire business.
In order to protect registered companies, the Supreme Court has mandated that any buyer of
good or services from registered MSMEs is required to make the payment on or before the agreed
date of payment or within 15 days from the day they had accepted the goods or services. If the
buyer delays the payment for more than 45 days after accepting the products or services then the
buyer has to pay interest on the amount that was agreed to be paid. The interest rate is three
times the rate that is notified by the Reserve Bank of India.

6. Fewer Electricity Bills

All companies that have the MSME Registration Certificate are entitled to concessions on their
electric bill. This enables businesses to boost production and take in more orders without worrying
about capital expenditure on costs like electricity and maintenance. micro, small and medium
enterprises can avail of the concession by providing an application to the department of electricity
along with the certificate of registration.

7. ISO Certification Charges Reimbursement

Any registered micro, small and medium enterprise can claim reimbursement of the expenses that
were made in order to obtain an ISO certification. This motivates entrepreneurs to get their
respective businesses ISO certified which helps them to do business abroad in terms of high-
quality exports.
 8. 100% tax exemption for Innovative start-ups
No Income Tax required to be paid in 3 years out of 7 Years – i.e., Start-ups are eligible for getting
100% tax exemption on profit for a period of three years in a block of seven years provided that
annual turnover does not exceed Rs 25 crores in any financial year. It is Allowed by way of
Deduction under Income Tax Act. In this deduction, companies up to 10 Years in existence are still
considered start-up. Income Tax Law Also Allows credit for minimum alternate tax (MAT) to be
carried forward for up to 15 years instead of 10 years.

9. Tender Preference to MSME

From time-to-time government has announced many tenders where only MSME Industries can
apply. Recently, as a part of Covid-19 relief package, the finance minister has announced that
there are issues of unfair competition from foreign companies in government procurement
tenders due to the size and strength differ and govt will not allow global tenders in such schemes
up to Rs 200 crore.

10. Prime Minister Employment Generation Programme for MSMEs

This scheme provides a subsidy for Employment Generation. The national-level nodal agency is
Khadi and Village Industries Commission (KVIC) and it implements the scheme at national level.
At the State level it is implemented through State KVIC Directorates, State Khadi and Village
Industries Boards, District Industries Centres and banks. The Government subsidy under the
Scheme is routed by KVIC through the partner banks for distribution to the entrepreneurs directly
in their Bank accounts.

11. Market Development Assistance Scheme for MSME

Under this scheme, The Central Government follows a Price and Purchase Preference policy
Wherein around 358 items are listed for exclusive purchases by Central Government from the
MSME units only. They are numerous supports like marketing assistance even for those products,
which are manufactured by MSMEs and do not fall under the purview of Reservation Policy.