Credit flow to Micro, Small and Medium-scale Enterprises (MSMEs) has seen a significant increase, assisted in part by the introduction of the Emergency Credit Linked Guarantee Scheme (ECLGS), according to the Economic Survey.
Data from the National Credit Guarantee Trustee Company (NCGTC) shows that as of November 10, 2022, 1.2 crore MSME units availed the ECLGS scheme and raised collateral-free resources for ₹3.6 lakh crore. A recent CIBIL report showed that 83% of the borrowers were micro-enterprises, and more than half of these borrowers had an exposure of less than ₹10 lakh. The NPA rate in banks for the category of MSME borrowers who availed of ECLGS was lower than the category that did not avail of the scheme.
The government has initiated the ‘Raising and Accelerating MSME Performance’ scheme for MSMEs at a total outlay of ₹6,062.4 crore. While ₹3,750 crore will be a loan from the World Bank, the Central government will fund the rest. The five-year scheme aims to strengthen institutions and governance at the Centre and State, improve Centre-State linkages and partnerships, and improve access of MSMEs to market and credit, technology upgradation and also address issues of delayed payments and greening of MSMEs.
The PLI Scheme across key sectors will benefit the MSME eco system in the country. The anchor units built in every sector will require a new supplier base in the entire value chain and most of these ancillary units will be built in the MSME sector. More than 100 MSMEs are among the PLI beneficiaries in sectors such as bulk drugs, medical devices, telecom, white goods and food processing.
Textile and Apparel
According to the Survey, the textile industry, which employs 4.5 crore people directly, faced challenges in 2022-2023 as exports moderated compared to 2021-2022. However, the exports during the first six months is 9.5% higher compared to pre-pandemic level of 2019-2020. Export of readymade garments registered year-on-year growth of 3.2% for the same period. Inflow of foreign direct investment is yet to recover to pre-pandemic levels.
In a move to develop integrated large-scale and modern industrial infrastructure for the entire textile value chain, the government has approved setting up of seven PM Mega Integrated Textile Region and Apparel (PM MITRA) Parks. The parks are expected to create a total of one lakh direct and two lakh indirect employment opportunities.
The government launched PLI Scheme for the textile sector with an approved outlay of ₹10,683 crores over five years, from January 1, 2022 to promote investments and increase production of Man-Made Fibre (MMF) apparel and fabrics and technical textile products. In the 64 applications approved so far, the total investment commitment proposed is ₹19,798 crore, with projected turnover and employment generation of ₹1.9 lakh crore and 2.5 lakh respectively, the survey said.
