Following submission of the task force report on micro, small and medium enterprises (MSME) to Prime Minister Manmohan Singh, the MSME Ministry has sought Rs.5,500 crore from the Union Finance Ministry to help it recover from the aftermath of the global economic slowdown that has hit the sector hard.
Senior MSME ministry officials have already met Union Finance Minister Pranab Mukherjee and urged funds worth Rs.5,500 crore over the next three to five years to implement the recommendations of the MSME task force to revive the sector. Besides, the ministry has forwarded the recommendations to other ministries concerned, including commerce, heavy industry and labour, to ensure speedy and time-bound implementation of recommendations, as directed by the Prime Minister.
Addressing a press conference here, MSME Minister Dinsha Patel said his Ministry had already begun the work on the task force recommendations and hoped that a majority of the initiatives suggested in the report would be implemented within the next six months.
“We have already sent the recommendations to other ministries concerned to examine suggestions of the report. We will take time-bound actions to ensure growth of the MSME sector, which employs 4.2-crore people and contributes about 45 per cent to the total manufactured output and 40 per cent to our exports,” he added. According to MSME Secretary Dinesh Rai: “They have urged the Union Finance Minister to increase credit flow to the sector, hike the limit under the priority sector to 60 per cent from the current 45 per cent and raise the tax audit limit to Rs.1 crore from Rs.40 lakh.” Pointing out that some policy changes as recommended by the task force would require intra-ministerial discussions and approvals from the Cabinet, Mr. Rai, however, said some of the suggestions could be implemented immediately like simplification of procedures in loans.
Call for separate fund
The MSME task force has recommended extension of the stimulus package for the sector for one more year, besides suggesting a procurement policy and creation of separate fund for the industry.
It has suggested that a standing review committee under Planning Commission Member Arun Maira be set up to monitor flow of credit to the MSME sector. It has also called for setting up an independent body at the national level for promoting MSMEs, which may provide financial and managerial support to set up industrial estates in partnership with the private sector.