New Delhi, Sept 18 (KNN) Ahead of the credit policy review, micro, small and medium enterprises have asked the Reserve Bank of India (RBI) to provide a special window for lowering interest rates for the MSME sector.
Such a scheme exists in several countries which give priority to the MSMEs known to be among the largest providers of employment.
Media reports suggest that RBI is considering a special dispensation for low interest rates to automobile and the reality sector.
“It is a welcome move. Many MSMEs would be sub-served through this. However, the same facility could be extended to the MSME sector as a whole,” said Immediate past president, Federation of Indian Micro and Small & Medium Enterprises (FISME), V K Agarwal.
It will be for the first time that the new RBI Governor, Raghuram Rajan will be unveiling the credit policy in the middle of slowdown and the Indian economy facing several challenges including high inflation rates and sharp depreciation of the rupee.
MSMEs contribute 8 per cent of the country’s GDP, 45 per cent of manufactured output and 40 per cent of exports.
As recognised by a senior RBI functionary, the labour and capital ratio in MSMEs and the overall growth in the sector are much higher than in the large industries.
Agarwal said that the central bank itself has realised that the shortage of capital, particularly the working capital is the major problem faced by the enterprises in the unorganised sector.