On June 25, 2019, The Reserve Bank released the report of the expert committee under former SEBI (Securities and Exchange Board of India) chairman U K Sinha on measures for the economic and financial sustainability of the MSMEs (Micro, Small and Medium Enterprises).
- FOF(Fund of Funds): Inorder to support Venture Capitalists or PE (private equity) investing in the MSME sector, the committee recommended the formation of government-sponsored FoF of Rs 10,000 crore.
- Distressed asset fund: It also recommends the creation of a distressed asset fund of Rs 5,000 crore for small enterprises. The fund will operate on the lines of the Textile Upgradation Fund Scheme (TUFS) which makes equity investments that lead to reviving the sick&Debt-burden units.
- SIDBI’s role: It stated the Small Industries Development Bank of India (SIDBI), which is responsible for the development of the MSME sector.
- It recommended revising the collateral free loan limit to Rs 20 lakh which also apply to loans sanctioned under the Pradhan Mantri Mudra Yojana (PMMY) and to Self-help group (SHG).
- The government has notified a procurement policy wherein PSUs(Public Sector Units)& government departments have to make 25 percent of their procurement from MSMEs through government e-marketplace (GeM) portal.