The MSME sector has hailed the establishment of Micro Units Development Refinance Agency (MUDRA) Bank with an allocation of Rs.20,000 crore for micro and small units. It has also welcomed the grant of Rs.3,000 crore afresh for sanctioning loan to the MSME sector without collateral security or third party guarantee with a cap of Rs.1 crore.
The decisions, apart from the promise to introduce hassle-free paperless clearances and electronic bill discounting, would help the sector immensely.
The Credit Guarantee Fund Trust for Micro & Small Enterprises (CGFTMSE) had been granted over Rs.5,000 crore in the previous budgets.
Representatives of the MSME sector feel that if implemented properly, the initiatives of the NDA Government will help achieve double- digit GDP growth, surpassing China.
Exuding confidence that the sector, particularly first generation entrepreneurs, would be benefited a lot, Visakha Autonogar Small-Scale Industrialists’ Welfare Association founder-president Ramakrishna Narappareddy told The Hindu that they were happy with the announcements. However, he wanted pressure from the government on scheduled banks to adopt a liberal attitude in refinancing them under amounts released from SIDBI, designated as the custodian for funds allotted for credit guarantee without any security up to Rs.1 crore.
“The banks are sanctioning, but are restricting the loan amount after a thorough scrutiny, defeating the purpose for which the fund has been created by the Centre, thereby dampening the spirit of MSME entrepreneurs,” he pointed out.
Mr. Narappareddy expressed his ire at not according special category status to Andhra Pradesh, and sought allocation of Rs.5,000 crore under special package for seven backward districts of North Andhra and Rayalaseema.
Startups
The decision to sanction Rs.1,000 crore for startups to encourage entrepreneurship has been hailed by those who have launched startup ventures at Sunrise Startup Village, Rushikonda, which is being mentored by MobMe Wireless of Kochi Startup Village fame.
Initiatives of the government, if implement properly, will help achieve double-digit GDP, say representatives of the sector
