MSME Ministry to explore ways to speedup advances to small units

New Delhi, Oct 10 (KNN)  Timely and easy access to credit has always posed a problem to SMEs.  To address the issue, MSME Minister, K H Muniyappa has called for a meeting of heads of Indian banks to find ways to speed up advances to MSMEs.
 
“The MSME Ministry is discussing ways to enhance the Credit Guarantee Scheme to meet the needs of a greater number of enterprises,” said a Confederation of Indian Industry (CII) press release, quoting Muniyappa.
 
The Minister was speaking at an inaugural session of the 10thGlobal India Summit organised by CII, in association with the MSME Ministry here yesterday.
 
Research and innovation are key to MSME global competitiveness, he said, adding, Indian MSMEs hold the key to job creation for a large number of young people who are entering the workforce.
 
Offering his views, Secretary, Ministry of MSME, Madhav Lal said that the sheer diversity of the MSME sector posed a big challenge to policy makers.
 
“Keeping this in view, the ministry is now attempting to introduce policies that meet the specific needs of MSMEs at different stages of their enterprise lifecycle.  For instance, the finance and credit needs of an early stage enterprise are necessarily different from the needs of enterprises at a mature stage.  Hence, policy interventions will be calibrated accordingly,” he said.  
 
The MSME sector, according to him has seen two key trends over the last decade, “the unorganised segment of MSMEs has recorded eight times the growth of the organised segment, and 95 per cent of MSMEs are in the unorganised segment. This poses a big challenge to MSME policy makers.
 
“The other key trend is that MSME share of national GDP, manufacturing output and exports are declining, albeit slowly. This needs to be addressed on a war footing,” he said. 

Indian MSMEs, Lal said, need an enabling ecosystem that helps them to tap the growing business opportunities in the global manufacturing space, referring to the global sourcing of auto components to illustrate how component manufacturers have benefited from the emerging global manufacturing value and production chains. 

The Inter-Ministerial Committee (IMC) for accelerating manufacturing MSMEs, which Lal heads, has made 61 recommendations to the government, addressing issues such as lack of robust statistics on different areas of the sector. The challenge, he said lay in capturing MSME data in the informal segment.   

CII and the Indian Institute of Foreign Trade (IIFT) signed a memorandum of understanding (MoU) for knowledge partnership in the presence of the minister. 

Speaking on the occasion, Director, Indian Institute of Foreign Trade (IIFT), Surajit Mitra said that the MSME sector has the highest potential for employment generation, and the maximum scope for modernisation, export orientation and induction of technology and skills.

IIFT’s partnership with CII would focus on policy and procedural reforms for exports, training programmes for export management, online dissemination of information to MSMEs, national dialogue of MSMEs, development of sectoral training modules, and induction of technology and skills. 

MSME sector needs key support from the government to address the issue of delayed payments, said Chairman, CII National Council on MSMEs and Chairman, Hi Tech Gears Ltd, Deep Kapuria, urging the government to increase the duration before after which MSME credit is declared by banks as NPAs from 90 days to 180 days. 

Kapuria also asked the MSME Ministry to introduce steps for better implementation of the Public Procurement Policy for MSEs, revisit the definition of MSME segments the minister’s attention to tax issues concerning MSME exporters, such as, interest subvention and duty drawback.