NIFTY reclaims 10K !

I was waiting to see the NIFTY scaling up back to 10K level. Today morning, it easily reached that level.

What is so special about 10K, it is another number, correct? 

I started my blogging a week ago and wanting to write on stock market. I was waiting for the 10K level to start blogging on stock market. For the last 5 consecutive sessions, the market gained - a first time to my knowledge In 2020.

Does this rally indicate that our economy is on track? Hold on!!!!

Stock Market index are indicators and may not reflect on economy growth.

What to expect from Stock Market from now?

• Will it be a BULL market?
• Will it be a BEAR market?
• Will it be range bount?

Ha ha ha...these are the options, unfortunately.

I will start my stock market coverage from this weekend. How to create a portfolio? How to pick stocks? What is in store for us in the stock market? The topic depends on the current trends.

Keep watching this space.

Safe and happy investing.

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CHAMPIONS - A portal for MSME by the Ministry

Today, 1-Jun-2020, Shri Narendra Modi, our Prime Minister launched an ICT (Information Communication Technology) based platform called CHAMPIONS which stands for Creation and Harmonious Application of Modern Processes for Increasing the Output and National Strength.

The Prime Minister in a tweet said “Launched the portal http://Champions.gov.in. This is a one-stop place for Micro, Small and Medium Enterprise (MSME) sector. The focus areas are support and hand-holding, grievance redressal, harnessing entrepreneurial talent and discovering new business opportunities,” 

What are the objectives of CHAMPIONS?

1. Grievance Redressal: To resolve the problems of MSMEs including those of finance, raw materials, labor, regulatory permissions etc particularly in the Covid created difficult situation;
2. To help them capture new opportunities: including manufacturing of medical equipments and accessories like PPEs, masks, etc and supply them in National and International markets;
3. To identify and encourage the sparks: i.e. the potential MSMEs who are able to withstand the current situation and can become national and international champions

How does this CHAMPIONS function?

It is an ICT based system is set up to help the MSMEs in the present difficult situation and also to handhold them to become national and international champions. 

It is a technology packed control room-cum-management information system. 

Apart from the  ICT tools including telephone, internet and video conference, the system is enabled by Artificial Intelligence, Data Analytics and Machine Learning. 

It is also fully integrated on real time basis with GOI’s main grievances portal CPGRAMS and MSME Ministry’s own other web based mechanisms.

The entire ICT architecture is created in house with the help of NIC in no cost. 

Similarly, the physical infrastructure is created in one of ministry’s dumping rooms in a record time.

This CHAMPIONS is created with a HUB and SPOKE model.

The Hub is situated in New Delhi in the Secretary MSME’s office. 

The spokes are in the States in various offices and institutions of MSME Ministry. 

As of now, 66 state level control rooms are created and made functional. They are connected through video conference also in addition to the portal of Champions. 

Source : PIB

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Revised NEW definition of MSME

On 13-May-2020 when the Finance Minister announced stimulus package to the MSME, revised the definition of MSME based on investment and turnover. Following table reflect the new criteria, which was revised after almost after a decade. This is effective 1-Jul-2020.

After representation from various groups, today on 1-Jun-2020 the Composite criteria for Medium enterprise revised to 

• Investment < 50 crores
• Turnover    < 250 crores

Accordingly, the NEW revised composite criteria for the MSME is as follows:

Note: For the purpose of computing TURNOVER, the export turnover will not be counted to assess the limit. That means, more headroom for exporting MSMEs

This will bring in more units under the MSME definition and benefit them.

If the banks and financial institutions support the MSMEs at the right time, am sure the MSME sector will boom, create more employment and make the "vocal for local" a success.

An ICT based system will monitor and help the MSME to fulfill their dreams through a portal named CHAMPIONS, under the Ministry of MSME.

CHAMPIONS stand for Creation and Harmonious Application of Modern Processes for Increasing the Output and National Strength.

To visit, click on CHAMPIONS

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10 pointers to manage your costs at this difficult situation

With the pandemic situation, the business has to survive. Getting the business, managing the expectations of the customers, getting the payment from the customers, making profit are challenging in the near future.

There may be schemes and stimulus announced by the government, banks may give finance to tide over the situation. But, we own the business and we are responsible for that.

While managing the sales and manufacturing are impacted due the pandemic situation, the costs remain. Let us see what best we can do to save the cost - if not avoidance, we can optimize the cost.

I request readers to comment on their thoughts and innovative way of avoiding/saving costs.

Here are the 10 ways to reduce your cost of operations

(1) Rent

• Negotiate with the landlord for 
• waiver for the period during lockdown
• reduction in the rent for a year - say 10-20%
• surrender a floor/space not needed
• Move from current premises to save on rent
• away from CBD, if that suits
• to a smaller premises
• Assess your space requirement
• we always take place keeping in mind the future plans. But now survival is important
• study says that productive space will be somewhere between 25%-30% of the total area.

(2) Electricity

• The cost per unit of commercial unit is higher. There may be rate slabs and increase for higher usage.
• Make sure that you use electricity only to the extent required.
• There are many ways, we can save electricity
• Use LED lights instead of the conventional CFL lights
• Switch off unwanted lights and when not required.
• Make sure the equipment and appliances are switched off, when not in use. 
• Do not keep the equipment in standby mode - remove the plug or switch off the power. This will save power.
• Look at replacing air-conditioner by Fans. I know it is tough decision. Survival is more important than comfort. Use dark curtains for office space, so that it remains little cool.
• make use of natural lighting
• Use 5 star rated appliances
• Go for roof top solar units - on operating expense model.   

(3) Discretionary expenses

• A strict NO. Do not get tempted to spend.
• Avoid some of the discretionary spends like travel, dinner, parties (can be celebrated once we come out successful). 
• Hold on to changing - unless it is critically required.
• Electronics : mobile, television, laptops, watches
• Furniture
• Painting - look at wallpaper, if you really need a makeover
• Car or bike

(4) Invest in essentials

• Make meetings to the extent possible through web - use free schemes from Zoom, Zoho, Google meet, Whatsapp, Skype etc.,
• invest in good web-cam, mic or headphone
• this will save fuel cost - with less travel
• saves travel time - you can spend on business
• Invest in good broadband
• Will take care of web meetings, emails
• helps in digital marketing
• Take insurance on goods etc., loss of profit, etc., which was given a pass. A small amount will save a lot at times of disaster.

(5) Invest in technology

• This is the time to invest in smart technologies like
• cloud space
• digital documentation - scanned document
• cloud accounting - pay as per your use
• digital attendance system
• cc television and recording equipment. We cannot afford to fraud/theft happening
• develop your website to enable online sale

(6) Process re-engineering

• You know your business better than anyone else. But we may over-look certain areas. Take advise from experts
• Improve on the efficiency by improving the methods or production
• Reduce your wastage/defects to ZERO.
• Reduce the time to convert the raw material to finished product
• Do not stock more than required : JIT - just in time
• Talk and listen to your staff. They can give better ideas to improve the processes.

(7) Preventive maintenance

• You cannot afford to invest in new machines. So, please take care of them by having a preventive maintenance.
• Machines do not break-down. We only maintain it incorrectly.
• Take AMC for equipment
• Insure your equipment and office

(8) Save on interest cost

• Try to reduce your interest cost by optimally using the loan facility.
• Look for subsidy or grant available - like export benefit. Talk to consultants
• Take more credit from suppliers. 
• Use platforms like TReDS to get money quickly
• Negotiate with your banker for lower rate.

(9) Outsource / SSC for accounting & compliance

• If you are a small organization, not only you get professional service, the outsourcing agency will also guide you on compliance, which keeps changing everyday.
• Risk of attrition will be taken care
• Real time reports can be made available through cloud platform
• If you are a group of companies - look at shared services center.

(10) Health

• Above all, take care of your health and your staff. This is most important. Any absence will have an impact on the business.
• Use Arokya Sethu
• Do physical exercises
• Take medical insurance for self, family and staff. They are critical for the business.

Incidentally, it was exactly 7 years back, I blogged on 10 ways to save your hard earned money - CLICK HERE to read it.

Again, please share your inputs also in the comments to the larger benefit of the society.

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MSME Knowledge Forum - started by CMAs

The excitement of the re-start of the economy ignited the spark in a group of four and thus was born MSME KNOWLEDGE FORUM.

They are a Group of four Professionals, of one mind, and have combined their knowledge to share their experience of over 15 decades to passionately serve the society and the MSME sector. 

This Group has served multiple industrial verticals, and are exposed to Large, Medium and Small Industries and are digital savvy. 

The Group, MSME KNOWLEDGE FORUM, created a blog, for building the knowledge of all stakeholders and collecting and writing stories; to share, to dream, to conquer.

They aim to make the journey of the MSMEs in rebuilding and growth with a feeling of déjà vu.

They would like to help MSMEs live their dreams; with satisfaction and with achievement.

This group conduct fortnightly sessions and support MSMEs. You can see me there as a guest speaker.

To know more about them visit https://msmeknowledgeforum.blogspot.com/

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Emergency Credit Line Guarantee Scheme (ECLGS)

The cabinet approved an additional Rs.3,00,000 crores of funding to eligible Micro, Small and Medium Enterprises (MSME) and interested MUDRA borrowers by way of "Emergency Credit Line Guarantee Scheme" (ECLGS).

Under ECLGS, 100% guarantee to be provided by National Credit Guarantee Trustee Co Ltd (NCGTC) in the form of a Guarantee Emergency Credit Line (GECL) facility.

Why this scheme?

Given the pandemic situation, most of the MSMEs are facing difficult situations and many may require further credit to manage the expenses during the lockdown. To encourage the lending institutions like banks to extend additional credit facilities to MSMEs this scheme is announced.

The Scheme would be applicable to all loans sanctioned under GECL during the period from the date of announcement of the Scheme to 31.10.2020, or till an amount of Rs three lakh crore is sanctioned under the GECL, whichever is earlier.

Who are all eligible?

All MSME borrowers upto Rs.25 crores outstanding credit as of 29-Feb-2020, which are less than or equal to 60 days past due on that day AND with an annual turnover of upto Rs. 100 crores

Quantum

Additional loan upto 20% of entire outstanding credit (upto Rs.25 crores) on 29-Feb-2020 as 

• Working capital term loan (in case of Bank or Financial Institution)
• Term loan (in case of NBFCs)

Tenor

Four years with one year moratorium period of one year

Interest rate

Banks and Financial Institutions : Max   9.25%

NBFCs                                     : Max 14.00% 

For FAQs on this scheme, CLICK HERE

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