Govt to soon decide on RBI panel report on MSME sector: Nitin Gadkari
Gadkari added that to make India a $5 trillion economy in the coming years, MSMEs will have to raise their contribution to GDP from the current 29 percent to 50 percent.
The government will soon take a call on the recommendations of UK Sinha committee to strengthen the Micro, Small and Medium Enterprises (MSMEs) sector, said Union Minister Nitin Gadkari on Thursday.
The committee set up by the Reserve Bank of India (RBI) under the former SEBI chief, among other things, had recommended the creation of a distressed asset fund with a corpus of Rs 5,000 crore insurance coverage to employees of MSMEs on the lines of Pradhan Mantri Suraksha Bima Yojana (PMSBY) and Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY) schemes, and cash flow-based lending.
Speaking at an event, Gadkari stressed that to make India a $5 trillion economy in the coming years, MSMEs will have to raise their contribution to GDP from the current 29 percent to 50 percent, in addition to increasing exports from the sector to 50 percent from 40 percent at present.
Referring to instances where goods are supplied by MSMEs, but a particular person or entity does not make payment after taking their delivery on multiple occasions, Gadkari said stringent action needs to be taken against such habitual offenders and the government will certainly take remedial measures in this regard.
About the UK Sinha panel report, the minister said he has spoken to the finance minister and it has been decided that the finance secretary and his MSME counterpart will prepare a final report on the recommendations in the next eight days.
The committee was set up to review the framework for MSMEs, and suggest long-term solutions for economic and financial sustainability for the sector, study the impact of recent economic reforms, and identify the structural problems impacting its growth.
Addressing the workshop, Gadkari said delay in payments to MSMEs leads to erosion of their working capital and he has spoken with the finance minister to address the issue.
He said there was a need to strengthen the MSME sector to add five crore jobs to the 11 crore created till now.
Besides, Development Commissioner (MSME), Ram Mohan Mishra said last week there was a meeting of CPSEs called by the finance ministry and they have been instructed to clear all pending dues owed to micro and small enterprises.