Credit flow to MSMEs to double in five years, says PM

Credit flow to MSMEs to double in five years, says PM

Manmohan Singh"Credit is the lifeline of any business. The government is committed to double the flow of credit to MSMEs in five years," Singh said after giving away national awards to entrepreneurs in the sector here.

The Prime Minister, who reviewed the performance and difficulties of the sector with the industry representatives on Wednesday, said public sector banks increased lending to MSMEs by 25 per cent in 2008-09.

According to estimates, MSMEs are given credit of about Rs 1,50,000 crore by PSU banks per annum. There are 2.60 crore units in the sector which contribute 40 per cent to exports. The Prime Minister has issued directions for constitution of a task force to look into the difficulties of MSMEs and recommend steps within next three months.

He said recent global economic slowdown has had an adverse impact on the growth of Indian economy. "Micro, small and medium enterprises have also not remained unaffected," he said, adding the government has been alive to the concerns.

The two stimulus packages the government announced in coordination with RBI have been of some help to the MSMEs, he added.

The Prime Minister said greater availability of credit can contribute to modernisation of the MSME sector, productivity and competitive ability.

He asked the entrepreneurs to explore other sources of finance like venture capital. "I would urge MSMEs to also explore new and emerging sources of finance such as venture capital and private equity."

Singh said the government has started several programmes for the benefit of the sector. It would be launching, in association with the Asian Development Bank, a comprehensive reforms in the khadi sector.

"I would urge the state governments and banks to work hard for the success of these programmes," Singh said, adding that in order to improve the competitiveness of the sector, the National Manufacturing Competitiveness Programme will have to be implemented in the right earnest.

On the recommendations of the Arjun Sengupta-led National Commission for Enterprises in the Unorganised Sector, Singh said some of them have been implemented while the others are being examined.

"The examination of the remaining recommendations of the Commission will be completed soon," he said. The Prime Minister said it is important to get a clear picture of the opportunities available to and the constraints faced by MSMEs, and for this an accurate data is required. "I believe that the fourth All India Census of this sector will provide detail information about the MSME sector," he said, adding the information will help in formulating new policies and strengthening the existing ones for effective implementation.

Earlier, Minister of State for MSME (Independent Charge) Dinsha Patel said the government has set a target to provide employment opportunities to 37 lakh people under the Prime Minister's Employment Generation Programme by 2011-12.
He also said that several new components like design development clinic, marketing assistance for SME and technology upgradation activities would be added to the National Manufacturing Competitiveness Programmme (NMCP).

"Soon, we will add a few more components under this programme (NMCP)," Patel said.
On the skill development front, he said, 2.6 lakh people were provided training in the last fiscal. 

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