The Minister of Micro, Small and Medium Enterprises (MSME), Nitin Gadkari, has acknowledged that employment generation is a challenge, but with the right economic policies, it can be achieved.

In conversation with BusinessLine after the government came out with booster shots for the MSME sector, Gadkari said, “There is a need to understand that jobs and employment are two different things and right now I am talking about employment generation, which is the biggest challenge for the government but not impossible to achieve, if we go ahead with right kind of policies.” Excerpts:

If the latest scheme (loan) gives automatic support to MSMEs, why is there this huge gap between the amount sanctioned to banks and the amount disbursed?

Now, we have software in place through which we get to know about the implementation of the schemes, total applications received as well as total sanctions. It came to our notice that no decision was taken on some applications. When we questioned the concerned banks, we were told that some applications didn’t come under their area. Then I asked them why they didn’t forward it to the concerned area. Now, we have instructed them to send them quickly.

There were also instances where applications were incomplete. I have asked officials at district level to coordinate and complete documentation and inform banks accordingly. So, we are monitoring the entire thing.

Then there is another scheme that gives loans in 59 minutes. It is true that the scheme was sanctioned, but disbursement was not done. So, I instructed that disbursement should be done and to provide me the actual figures. The ₹3-lakh crore fund that banks have received under the collateral-free automatic loan scheme is a huge amount that has been disbursed.

Why is there a proposal for overseas funding?

It is important to raise liquidity in the market as it will enhance purchasing power and improve demand and supply, eventually giving a boost to employment which, again, will lead to growth in per capita income. In these times, investors across the globe are worried and India is a safe destination for them. We will rate MSMEs that export and have a good tax record, helping them tap the market eventually.

The way we have NSE and BSE, there will be MSME stock exchange where they will take our fund and take money from the market. I plan to consult the RBI to explore whether foreign investment can be allowed in NBFCs to strengthen them.

…We need to come up with a mechanism to figure out the kind of investment that should come — be it in infrastructure, MSME, railways or bullet trains. Apart from upgrading technology, foreign investment can help increase our exports and reduce imports.

The Finance Minister recently said the Emergency Credit Line Guarantee Scheme (ECLGS) will be open to all companies, not specifically to MSMEs. Your views.

The decision taken by Finance Ministry is the final decision. The fund available in it is worth ₹3 lakh crore. The disbursement is currently on and all industries will benefit from this.

Recently, you said creating employment opportunities in rural, agriculture and backward areas is the need of the hour and that priority will be given to import substitution. Can you elaborate?

Our nation resides in villages. Our economic policy has focussed on villages, the poor, farmers, and we have decided to deepen this.

For example, MSME contribution to our GDP is 29 per cent and we want to take it to 50 per cent. MSME share in exports is 40 per cent and we want to take it to 60 per cent. So far, the sector has created 11 crore jobs and in the next five years we want to create 5 crore jobs.

The turnover of our village industry is ₹88,000 crore and our priority is Agro MSME. We are contemplating what can be done through this in villages. For example, ethanol requirement in our country is such that we can reduce our oil import by 75 per cent. In India, rice, wheat and sugar are in surplus. So, we have decided to make ethanol from sugar and rice. We import petroleum products worth ₹7 lakh crore. We can reduce this by ₹1 lakh crore and spend it for agriculture.

Blue economy is of ₹1 lakh crore. Our fishermen go to sea up to 7 nautical miles. Now we have trawlers to help them go to the high seas for fishing. Fishing producer companies on the lines of farmer producer companies will be formed and given a loan of ₹1 crore.

We are also planning to come up with alternatives to items that India currently imports.

Basically coming up with import substitutes…

Slowly, we are trying to come up with import substitutes that are cost-efficient and pollution-free, and an effective export-oriented policy. We can achieve this as we have huge manpower, skilled workforce, availability of raw materials and we can make quality products. By improving technology and bringing foreign investments, we can definitely give a boost to our exports.

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