Revival and Rehabilitation Scheme for Defunct MSMEs and Cashew Processing Units

Introduction: The trend in increasing number of defunct units is a challenge to the secondary sector. The MSMEs which have become defunct due to genuine issues in the value chain and have potential needs to be revived and rehabilitated considering the role of these units play in the state economy, the Government of Kerala launched a new scheme for defunct MSMEs including cashew processing units during 2020-21. Besides the lack of improved technology, MSME units become defunct due to constraints on marketing, competition from MNCs and global challenges etc. In the field of cashew units the processing cost is comparatively higher in the state and competition from other countries is badly high. Most of the cashew units are in financial crunches. Process mechanization is the only way to revive the units. > Objective: The scheme envisages supporting defunct MSMEs in the manufacturing sector including cashew processing units through assistance in the form of capital grants and working capital incentives. > Definitions: Defunct MSMEs: MSMEs which are non-operational for 6 months or more but can be revivable. In the case of units which become defunct due to the plastic ban and those who wish for diversification, the above time limit is not applicable. Defunct Cashew Processing Units: The Cashew Processing Units which were defunct at least for six months/no matter whether they have received any Government assistance or bank loan within six months and are in the process of revival.