New Delhi [India], February 1 : During the presentation of the Union Budget 26-27, the Finance Minister, Nirmala Sitharaman, proposed to introduce a market-making framework with suitable access to funds and derivatives on corporate bond indices. She also proposed introducing total-return swaps for corporate bonds.
"To encourage the issuance of municipal bonds of higher value by larger cities, I propose an incentive of Rs 100 crore for a single bond issuance of more than Rs 1000 crore," The Minister said.
"The current scheme under Atal Mission for Rejuvenation and Urban Transformation (AMRUT), which incentivises issuances up to Rs 200 crore, will also continue to support smaller and medium towns," Sitharaman noted.
Earlier, the Finance Minister of India, Nirmala Sitharaman, proposed introducing a dedicated Rs 10,000-crore SME growth fund to create future jobs and incentivise enterprises based on select criteria. She stated that the government recognises MSMEs as a vital engine of growth, and proposes a three-pronged approach to help them grow as champions.
For equity support, "I propose to introduce a dedicated Rs 10,000 crores SME growth fund to create future champions, incentivising enterprises based on select criteria. I also propose to top up the self-reliant India fund set up in 2021 with Rs 2,000 crore to continue support to micro-enterprises and maintain their access to risk capital," she said.
More than Rs 7 lakh crore has been made available to MSMEs through liquidity support. "To leverage its full potential, I propose four measures. One: mandate TREDS as the transaction settlement platform for all purchases from MSMEs by CPSEs. Survey as a benchmark for other corporates. Two: introduce a credit guarantee support mechanism through CGT-MSC for invoice discounting on the TREDS platform. Three: link GEN with TREDS for sharing information with financiers about government purchases from SMEs, encouraging cheaper and quicker financing. Four: Introduce TREDS receivables as asset-backed securities, helping develop a secondary market, enhancing liquidity and settlement of transactions," the Minister said.
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