7-Sep-2020: Government of India Expands the support to Artisans manifold, for making Agarbatti, to make India Aatma- Nirbhar
Taking a holistic approach and looking to the enhanced interest of the stakeholders, Ministry of Micro Small and Medium Enterprises (MSME), further expanded the reach and support to Artisans, involved in Agarbatti making, and to the Agarbatti Industry, by issuing new guidelines on 4th September, 2020. Further to its launching the support program on 30.07.20, Ministry has looked at all aspects of the industry, beyond just supply of machines for making Agarbatti. This includes ensuring supply of inputs and raw materials, the demand for which has increased hugely in last one year. The four main pillars of the new program are-
- Continuously supporting the artisans through training, raw material, marketing and financial support;
- Working on all aspects of this product, like innovation in the fragrance & packaging, use of new / alternate raw materials like re-usable flowers, coir pith etc., supply of bamboo sticks by closely working with Ministry of Agriculture etc. A ‘Center of Excellence’ for this purpose is being set up in FFDC (Flavour and Fragrance Development Center) Kannauj;
- Setting up 10 clusters with proper marketing linkages under SFURTI (Scheme of Fund for Regeneration of Traditional Industries) scheme of the Ministry of MSME at a total cost of about Rs. 50 Cr., to benefit about 5000 artisans for their sustainable employment and enhanced earnings;
- Strengthen the machine manufacturing capability to achieve self-sufficiency in the country and develop various other products by setting up ‘Centers of Excellence’ with IITs/NITs etc. at a cost of Rs. 2.20 crore.
Under the expanded program announced on 4th September, 400 Automatic Agarbatti making machines as against 200 earlier, and additional 500 Pedal operated Machines will be given to ‘Self Help Groups (SHGs)’ and individuals through 20 pilot projects, across the country with proper marketing and raw material supply tie ups. The program will immediately benefit about 1500 artisans, in providing sustainable employment with increased earnings. Artisans developing hand rolled Agarbatti and ‘Migrant workers’ will be given preference as part of the program.
Now, to make India Aatma- Nirbhar in this sector, the total size of the program, has been increased to more than Rs 55 Cr, which will include immediate support to about 1500 artisans of about Rs 3.45 Cr, development of two centers of Excellence costing at Rs 2.20 Cr at IITs/NITs and at FFDC Kannauj and setting up of 10 new SFURTI clusters at a cost of about Rs 50 Cr. , benefitting about 5000 additional artisans. Earlier the size of the program was of Rs 2.66 Cr. covering about 500 artisans.
The Khadi and Village Industries Commission (KVIC), one of the statutory organizations, under the M/o MSME, will implement the program and will handhold the artisans & SHGs with proper backward & forward linkages and needful support.
These projects, will give boost to the Agarbatti industry and help in further building indigenous capability in all areas of Agarbatti manufacturing with increased exports, and enhanced employment opportunities to the Artisans and entrepreneurs.
2-Aug-2020: MSME Minister Shri Nitin Gadkari Approves a New Scheme to Make India Aatmanirbhar in Agarbatti Production
Union Minister for MSME, Shri Nitin Gadkari has approved a unique employment generation program proposed by Khadi and Village Industries Commission (KVIC) to make India Aatmanirbhar in Agarbatti production. The program named as “Khadi Agarbatti Aatmanirbhar Mission” aims at creating employment for unemployed and migrant workers in different parts of the country while increasing domestic Agarbatti production substantially. The proposal was submitted to the Ministry of MSME for approval last month. The pilot project will be launched soon and on full-fledged implementation of the project, thousands of jobs will be created in the Agarbatti industry.
The scheme designed by KVIC on PPP mode is unique in the sense that in a very less investment, it will create sustainable employment and help private Agarbatti manufacturers to scale up Agarbatti production without any capital investment by them. Under the scheme, KVIC will provide Automatic Agarbatti making machines and powder mixing machines to the artisans through the successful private Agarbatti manufacturers who will sign the agreement as business partners. KVIC has decided to procure only locally made machines by Indian manufacturers which also aims at encouraging local production.
KVIC will provide 25% subsidy on the cost of the machines and will recover the remaining 75% of the cost from the artisans in easy installments every month. The business partner will provide the raw material to the artisans for making Agarbatti and will pay them wages on job work basis. Cost of artisans’ training will be shared between KVIC and the private business partner wherein KVIC will bear 75% of the cost while 25% will be paid by the business partner.
Each automatic Agarbatti making machine makes approximately 80 kg Agarbatti per day which will provide direct employment to 4 persons. One powder mixing machine, to be given on a set on 5 Agarbatti making machines, will provide employment to 2 persons.
The current job work rate for Agarbatti making is Rs 15 per kg. At this rate, 4 artisans working on one Automatic Agarbatti machine will earn minimum Rs 1200 per day by making 80 kg of Agarbatti. Hence every artisan will earn at least Rs 300 per day. Similarly, on powder mixing machine, each artisan will get a fixed amount of Rs 250 per day.
As per the scheme, the wages to the artisans will be provided by the business partners on weekly basis directly in their accounts through DBT only. Supply of raw material to the artisans, logistics, quality control and marketing of the final product will be the sole responsibility of the business partner. After recovery of the 75% cost, the ownership of the machines will automatically be transferred to the artisans.
A two-party agreement to this effect will be signed between KVIC and the Private Agarbatti manufacturer for successful running of the project on PPP Mode.
The scheme has been designed in wake of the two major decisions – import restriction on Raw Agarbatti and increase in import duty on Bamboo sticks - taken by the Ministry of Commerce and Ministry of Finance respectively on the initiative of Shri Gadkari.
KVIC Chairman Shri Vinai Kumar Saxena said the two decisions of the Central Government created a huge employment opportunity in the Agarbatti industry. “In order to encash the huge employment generation opportunity, the KVIC designed a program namely “Khadi Agarbatti Aatmanirbhar Mission” and submitted to the Ministry of MSME for approval,” Saxena said.
The program aims at handholding artisans and supporting the local Agarbatti industry. The current consumption of Agarbatti in the country is approximately 1490 MT per day; however, India’s per day production of Agarbatti is just 760 MT. There is a huge gap between the demand and the supply and hence, immense scope for job creation.
2-Sep-2020: Ceiling/Cap on MEIS benefits available to exporters on exports made from 1.9.2020 to 31.12.2020
A limit has been imposed on total rewards under the Merchandise Exports from India Scheme (MEIS). A notification issued by Directorate Generate of Foreign Trade (DGFT) last evening says that the total reward which may be granted to an IEC holder under the scheme shall not exceed Rs.2 Crore per IEC of exports made in the period 1.9.2020 to 31.12.2020. Further, it has also been informed that any IEC holder who has not made any exports for a period of one year preceding 1.9.2020 or any new IECs obtained on or after 1st September would not be eligible for submitting any claim under MEIS. In addition, MEIS Scheme is withdrawn w.e.f. 1.1.2021. The above ceiling will be subject to further downward revision to ensure that the total claim under MEIS for the period 1.9.2020 to 31.12.2020 does not exceed prescribed allocation by the Government which is Rs.5,000 Crore.
It is estimated that 98 per cent of the exporters’ claim of MEIS will be unaffected by the changes. The unaffected exporters who have already factored in MEIS in the pricing of their products do not face any change or uncertainty since neither coverage of products nor rates of MEIS will be changed. An advance notice of 4 months of the end date of MEIS provides certainty for the future pricing decisions.
28-Oct-2018: WTO sets up dispute panel on India-US case on export subsidies
The World Trade Organisation's dispute settlement body has set up a panel to examine the US complaint against certain export-subsidy measures by India as both the sides failed to resolve the issue at consultation level. In March, the US dragged India to the global trade body's dispute settlement mechanism over export subsidies, saying that these incentives were harming the American companies.
The process of composition of dispute panel is over. The working procedure and the time table for the panel proceedings has been circulated.
The US has requested for the establishment of a dispute panel to examine the allegations on India's export incentive measures.
Seeking consultation under the aegis of the WTO is the first step of dispute settlement process. If the two nations are not able to reach a mutually agreed solution through consultation, the complainant can request for a WTO dispute settlement panel to review the matter.
The US has challenged India's export subsidy programmes such as Merchandise Exports from India Scheme in the WTO, asserting that these initiatives harm its companies by creating an uneven playing field.
They have stated that all WTO members, including India, are required to provide subsidies consistent with provisions of the WTO's Agreement on Subsidies and Countervailing Measures, including refraining from providing subsidies contingent upon export performance.
During the consultation process, the US had alleged that India was continuing to grant these export-contingent subsidies and even expanded the scope and scale of the subsidies.
India had stated that it was disappointed that the US chose to move forward with a request for a panel, as it believed bilateral consultations held on April 11 were constructive. During the consultations, India provided a detailed understanding of the schemes implemented under its Foreign Trade Policy by answering all the questions raised by the US. India has also said that the schemes identified by the US do not violate India's WTO obligations and are in conformity with all the elements of the agreement.
India's exports to the US stood at USD 47.9 billion in 2017-18, while imports aggregated at USD 26.7 billion during the same fiscal.
11-May-2018: Rates enhanced for certain products/services under the MEIS to promote exports, would continue beyond June 30.
In exercise of powers conferred under paragraph 1.03 of the Foreign Trade Policy 2015-2020, the Director General of Foreign Trade hereby makes the following amendments in the following Public Notices issued earlier by this Directorate.
The rates for items under MEIS Appendix 3B / Service categories in Appendix 3D which were enhanced in the Mid Term review are continued beyond 30.06.2018.
26-Nov-2017: DGFT doubles incentives rates for garments under MEIS
The government doubled the incentive for exporters of garments and made-ups under the Merchandise Export from India Scheme (MEIS) to support declining textile exports.
Under the programme, exporters are given duty exemption scrips that are pegged at a certain percentage of total value of their exports. These scrips can be used to pay duties on inputs including customs. Incentive rates for the two sectors have been enhanced to 4% of value of exports from 2% with effect from November 1to June 30, 2018.
The estimated annual incentives will be Rs 1,143.15 crore for 2017-18 .This measure will incentivize the exports of labour intensive sectors of readymade garments and made ups and contribute to employ.
The measure comes amid a sharp fall in the export of labour-intensive sectors such as textiles, leather, gems and jewellery, handicrafts, readymade garments and carpets among others.
Government (DGFT) has also enhanced rates for garments and made-ups to 4% of value of exports under Merchandise Exports from India Scheme (MEIS). New MEIS rates are effective from 1 Nov 2017. Enhanced MEIS rates will further boost exports of garments and made ups from India.
The made-ups sector, which includes products such as towels and bedsheets, is the second-largest employer in the textile sector after apparel.
The cabinet last year approved a set of reforms including simplified labour laws and technology upgradation for the sector besides a Rs 6,000 crore package for employment generation and promotion of textile exports.
24-Jun-2020: Ministry of MSMEs launches another funding scheme to help the distressed MSME sector
Minister of MSME, Shri Nitin Gadkari today launched the Credit Guarantee Scheme for Sub-ordinate Debt (CGSSD) which is also called “Distressed Assets Fund–Sub-ordinate Debt for MSMEs”.
As per the Scheme, the guarantee cover worth Rs. 20,000 crores will be provided to the promoters who can take debt from the banks to further invest in their stressed MSMEs as equity.
It was being felt that the biggest challenge for stressed MSMEs was in getting capital either in the form of debt or equity. Therefore, as part of Aatmanirbhar Bharat package, on 13th May, 2020, Finance Minister had announced this scheme of sub-ordinate Debt to the promoters of operational but stressed MSMEs. After completion of necessary formalities including approval of CCEA and consultation with Finance Ministry, SIDBI and RBI among others, the scheme was formally launched today by Shri Gadkari from Nagpur.
The highlights of the scheme are:
- This Scheme seeks to extend support to the promoter(s) of the operational MSMEs which are stressed and have become NPA as on 30th April, 2020;
- Promoter(s) of the MSMEs will be given credit equal to 15% of their stake (equity plus debt) or Rs. 75 lakh whichever is lower;
- Promoter(s) in turn will infuse this amount in the MSME unit as equity and thereby enhance the liquidity and maintain debt-equity ratio;
- 90% guarantee coverage for this sub-debt will be given under the Scheme and 10% would come from the concerned promoters;
- There will be a moratorium of 7 years on payment of principal whereas maximum tenor for repayment will be 10 years.
It is expected that this scheme would provide much required support to around 2 lakh MSMEs and will help in reviving the economic activity in and through this sector. It will also help in protecting the livelihoods and jobs of millions of people who depend on them. Promoter(s) of MSMEs meeting the eligibility criteria may approach any scheduled commercial banks to avail benefit under the scheme. The scheme will be operationalised through Credit Guarantee Fund Trust for MSEs (CGTMSE). Necessary guidelines along with answers to possible FAQs have been issued today and made public in this regard.
On this occasion, Shri Nitin Gadkari thanked the Prime Minister and Finance Minister for this Scheme. He also thanked the officials of Department of Expenditure, Department of Financial Services and Governor of RBI for supporting this innovative Scheme of the Ministry.