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New MSME Economic Activity Index based on GST sales data launched by SIDBI, Jocata; check details

A minimum of 13 months of sales data (GSTR1) is required to calculate the Index for a particular month and a minimum of 1,000 MSMEs are considered to release the Index for any month.

MSME growth: Financial advisory and technology company Jocata on Friday announced its partnership with SIDBI, the principal financial institution for MSME development, to launch an MSME Economic Activity Index – Sumpoorn. It is a relative amplitude-adjusted composite diffusion index developed using consent-led and anonymized monthly sales data reflected in official GSTN returns of more than 50,000 MSMEs seeking credit from financial institutions from October 2019 to date instead of based on a survey data. 

“While currently available macro indices capture business expectations and rely on opinion or survey-based data, Sumpoorn looks to bridge this gap through deeper interpretation of the changes in the MSME sales activity,” the company said in a statement.

Sivasubramanian Ramann, Chairman & Managing Director, SIDBI said, “The underlying authentic data of GST provides credibility to the Index. With time, the same can be expanded to include more dimensions. I hope the Index shall be of value to the readers and provide a rich perspective on the prevalent trends of the MSME sector.”  

Jocata said that a team of credit experts, data scientists and senior economists have built and tracked the Index over the past four years ensuring its ability to accurately represent the MSME economy and capture the impact of macroeconomic conditions. 

Prashant Muddu, Managing Director & CEO at Jocata said Sumpoorn will address the MSME knowledge gap and empower financial institutions, policymakers, economists and researchers to strategize credit flow and create tailored policies for the sustainable growth of MSMEs across the country.  

“To provide in-depth and granular MSME insights, we are further developing sub-indices that will identify growth opportunities, provide early warning signals and channelize capital allocation to different sectors (as classified under GST by HSN) and clusters across geographies,” Muddu said. 

Jocata, a subsidiary of online payment gateway company BillDesk, was founded in 2010 to specialize in digital lending using credit automation, smart decisioning and intelligent monitoring.

A minimum of 13 months of sales data (GSTR1) is required to calculate the Index for a particular month and a minimum of 1,000 MSMEs are considered to release the Index for any month. The current monthly count of MSMEs is around 2,500, according to the company. It will release the index monthly with only a four-week reporting cycle. 

MSME sales performance will be measured on a scale of 0 to 1 in the index while the ‘bin’ will represent the state of contraction or expansion of economic activity of the sector, the company said on its website.