Micro, Small and Medium Enterprises (MSMEs) will soon have access to adequate funds with the initiative taken by the central government to increase the credit availability to the sector.
Speaking at a seminar organized by the Maharashtra Pradesh Congress Committee (MPCC) here on Tuesday, Union Finance Minister Pranab Mukherjee said the government was trying to remove obstacles in the growth path of the MSMEs.
“The Prime Minister's task force on MSME has submitted its report in January and has recommended an agenda for immediate action to cover all areas including credit, marketing, labour, technology, skill development and taxation. The Prime Minister's Council on MSME will now be regularly monitoring the implementation of the recommendations,'' he said.
It is estimated that in terms of value, the MSME sector accounts for about 45 per cent of the manufacturing output and around 40 per cent of the total exports of the country.
It employs an estimated 60 million people spread over 26 million registered and unregistered enterprises. There are 1.5 million registered units, out of which 95 per cent are micro enterprises and about 4.7 per cent are small enterprises.
However, unlike larger companies, the MSME sector does not have access to alternative avenues of raising capital, “despite its commendable contribution to the gross domestic product (GDP), exports and employment,'' he said.
The Finance Minister pointed out that there were a host of problems relating to registration and credit rating which needed to be sorted out before successful listing. “There has been a general grudge that commercial banks mainly give priority to the corporate sector with better credit rating and provide credit at below prime lending rates.
But with the switch over to lending on the basis of base rate from July 1, their lending would be transparent and hopefully the small scale and medium size enterprises would get more banking funds at favourable rates.''
The Small Industries Development Bank of India (SIDBI) is the principal financial institution for the promotion, financing and development of industry in the small scale sector and to co-ordinate the functions of the institutions engaged in the promotion and financing or developing industry in the small scale sector. NABARD has also undertaken similar initiatives focusing on rural enterprises.
Non-availability of skilled manpower is one of the key hurdles faced by MSME units and Mr. Mukherjee said that to promote skill development, the Prime Minister's Council on National Skill Development laid down the core governing principles for operating strategies for skill development. The Council has a mission of creating 50 crore skilled persons by 2020 and the National Skill Development Corporation which started functioning in October 2009, has targeted creating 15 crore skilled manpower.
“As a political entity, we have a responsibility to create awareness in the small scale sector and MSMEs. They are not aware of the facilities available to them. We should create an awareness campaign as the entire paradigm of development has changed and inclusive growth to participative growth,'' said Mr. Mukherjee.
