Micro, small and medium enterprises (MSMEs) are vital for India's economic growth and they need to get more institutional credit, President Pranab Mukherjee said Wednesday.
These enterprises are "perhaps the most crucial link between India's economic growth and socio-economic transformation", the president said in an address at Vigyan Bhavan in New Delhi.
He spoke after presenting National Awards to Micro, Small and Medium Enterprises (MSME) and Banks.
He said the micro, small and medium sector contributed about 8 percent of the country's GDP, 45 percent of the manufactured output and 40 percent of the total exports.
The president said the challenges to the MSME sector in India were many.
If the sector had to be a true agent of socio-economic change, "we must direct our efforts at increasing the competitiveness of this sector by enhancing the availability of institutional credit," he said.
They should also go for innovation and technology, provided adequate industrial infrastructure, skill development and market support, he added.
He said that the growth potential of the MSME units should not be impeded by lack of access to financial resources.
Mukherjee stated that there was a need to increase the reach and coverage of financial institutions by expanding branch network to locations near industrial clusters.
The president said India's future progress would be determined largely by the level of technology that would drive the economy.
Innovation and technology provided the competitive edge that the industrial sector at large and the MSME sector in particular should not be deprived of, he said.
The MSME units could prosper only if there was a concerted effort at widening the market for their products, he added.