In a written reply to a question in the Lok Sabha over rising outstanding bank credit of a provisional amount of Rs 3,76,625 crore to Micro and Small Enterprises (MSEs), Union Minister for Micro, Small & Medium Enterprises (MSMEs), Virbhadra Singh cited R
In a written reply to a question in the Lok Sabha over rising outstanding bank credit of a provisional amount of Rs 3,76,625 crore to Micro and Small Enterprises (MSEs), Union Minister for Micro, Small & Medium Enterprises (MSMEs), Virbhadra Singh cited Reserve Bank of India’s (RBI) guidelines to all scheduled commercial banks over lending to MSMEs and providing time frame for dispensing the loan applications and loan limit to release the collateral demand for MSEs.
Noting the Task Forces of Prime Minister recommendations to RBI, he said that RBI has advised the banks to achieve a 20 per cent year-on-year growth in credit to MSEs and a 10 per cent annual growth in the number of Micro Enterprises accounts.
Narrowing down to Micro Enterprises, the minister added that, “As per the RBI’s extant guidelines to banks, 60 per cent of MSEs advances should go to the Micro Enterprises and this is to be achieved in stages viz., 50 per cent in the year 2010-11, 55 per cent in 2011-12 and 60 per cent in 2012-13.”
Among all this, he also stressed on registration of MSMEs as a precursor to the financial benefits by the MSME Ministry while taking a liberal stand for the unregistered one to get assistance from banks.
Highlighting the performance by MSE sector in the last decade, the minister pointed the latest figures to the rise of its Gross Domestic Product (GDP) share by Central Statistics Office, Ministry of Statistics and Programme Implementation, from 5.84 per cent in fiscal year 2004-05 to 8.72 per cent in 2008-09.
In terms of employment generation, the All India Census of Micro, Small & Medium Enterprises, government’s apex body monitoring employment by MSMEs in its last census of 2006-07 reported a total of 93.09 lakh employments among the 5.94 per cent registered MSMEs in the country out of a total of 261.01 lakh units. In contrast, the unregistered ones as per the ‘Quick results: Fourth All India census of MSME 2006-07 employed as many as 502.57 lakh people, mentioned Singh.