The policy package, which was tabled in Parliament by Finance Minister P Chidambaram, is aimed at providing relief to the sector and making it globally competitive.
The package envisages at least 20 per cent growth in credit flow to SMEs with the objective of doubling loans to the sector to Rs 1,35,000 crore by 2009-10 from Rs 67,600 crore (Rs 676 billion) last fiscal.
The Reserve Bank will also issue a guideline for revamping the debts of viable SMEs on the lines of corporate debt restructuring mechanism applicable for big companies.
The package also calls for one-time settlement scheme by this fiscal for defaulting SSI units, which have become non-performing asset accounts in banks.
While asking banks to step up loans to SMEs, the finance ministry has proposed "transparent rating system" that will enable banks to charge interest rate according to the credibility of the company.
Small Industries Development Bank of India and Credit Information Bureau India Ltd will set up the credit rating agency to rate SMEs.
Sidbi along with Indian Banks Association would also collect data on risks associated with each SME cluster and develop an IT-enabled application, appraisal and monitoring system.
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