Economy

Gadkari asks MSMEs to consider raising money from markets

Our Bureau New Delhi | Updated on April 16, 2020 Published on April 16, 2020

Minister for Road Transport and Highways Nitin Gadkari

Micro, small and medium enterprises (MSME) with good track record can raise funds from the stock exchanges and avail 15 per cent of funds thus raised from the government, according to a proposal awaiting Cabinet nod.

MSME and Road Transport Minister Nitin Gadkari said this on Wednesday while speaking at an industry interaction arranged by PHDCCI. The proposal has already been approved by MSME Ministry and Finance Ministry, he added.

Explaining the contours of proposal, which might be better than approaching banks, Gadkari told the members of industry body, “ If you are able to raise ₹ 50 crore, government will put in ₹ 7.5 crore.”

“Please understand that banks are also under pressure,” the Minister told the industry representatives while requesting them to consider institutions other than banks to raise funds.

“We have already cleared it (the proposal)...NSIC (National Small Industries Corporation) or another body will control it. The idea is to give it to MSMEs with good track record,” said Gadkari.

Cabinet is likely to consider a proposal regarding setting up ₹ 10,000 crore fund of funds for MSMEs. The move will help MSMEs with good track record in GST system and AAA ratings to raise funds from the stock market.

Lowering logistics cost, power cost and capital cost will help lower the production cost,which in turn will provide a boost to the exports, said Gadkari.

Noting that MSMEs contribute 29 per cent to the economy’s growth and 48 per cent of exports, he said MSMEs could benefit from US and Japan’s move to lower their imports (sourcing their products) from China in the post-Covid-19 scenario.

To encourage MSMEs, Gadkari quoted from Richard Nixon’s biography, “The man is not finished when he is defeated. But, he is finished when he quits.”

Published on April 16, 2020

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