‘MUDRA Bank to address financial needs of MSMEs’

The Centre has sought to address the financial needs of the Micro Small and Medium Enterprises (MSME) by creating the MUDRA Bank formed with a huge corpus of ₹20,000 crore, according to Giriraj Singh, Minister of State for MSME, Government of India.

He also said the Government was seeking to enhance the financial ceiling for eligibility to be classified as MSME so that more units could be brought under the ambit of MSME.

Speaking at the inauguration of the Intec 2015, the five day International Machine Tools & Industrial Trade Fair organised by the Coimbatore District Small Industries Association (Codissia) here on Friday, the minister said the Government was focused on the development of the MSME sector in view of the pivotal role it played in employment generation.

The nearly 5.77 crore MSMEs employed a close to 14 crore people and their share of the country’s manufacturing output was nearly 40 per cent and their share of exports also was substantial. The government was keen to improve the competitive edge of the MSME sector and increase their share of the GDP and employment generation.

Lauding the role of Coimbatore in the promotion of MSME sector, Giriraj Singh said, “Coimbatore is a Motherland of MSME.” He said Prime Minister Narendra Modi established a new institution for ‘financial inclusion’ of the micro and small units - the MUDRA (Micro Units Development and Refinance Agency) Bank on April 8 with a corpus of ₹20,000 crore to support micro and small units.

The beneficiaries have been divided into three categories for extending assistance, in the first are those who would be provided loans up to ₹50,000, in the second category are people who would be extended loans between ₹50,000 up to ₹5 lakh and beneficiaries eligible for loans above ₹5 lakh up to ₹10 lakh come in the third category.

Giriraj Singh, referring to the plethora of rules that stifled the growth of the MSMEs, said his department was trying to simplify the rules. Another major issue that confronted the MSMEs was the ceiling on investment in plant and machinery / equipment for manufacturing / service enterprises to be categorised as MSMEs.

The department was trying to increase the investment limit under various slabs. For instance, the investment limit for micro enterprises at present stood at ₹5 lakh which the government wants to hike to ₹50 lakh. For small enterprises, the limit was ₹5 crore that the GoI wants to double and the limit for medium enterprises was at present ranged from ₹5 crore up to ₹10 crore that the Government wanted to be increased to ₹10 crore to ₹30 crore.

Later asked during his interaction with the media about the observation of KC Tyagi, Chairman of the Parliamentary Committee on MSMEs here recently that both the UPA and NDA Governments had failed to protect the MSMEs, Giriraj Singh said Tyagi was a ‘political person.’ The government has made it compulsory for key departments to procure 20 per cent of their needs from the MSMEs and said, “KC Tyagi always has spoken as an opposition leader, not as a Parliamentary committee chairman.”

Asked about MSMEs in Coimbatore being allowed to form a consortium to bid for defence department’s orders, the minister said the ‘department already (was) positive’ and the intention of the Government was how to help the sector to grow and said ‘I always help relax all hurdles. The government also plans to create 500 incubation centres and establish 15 new tool rooms with 3D technology.

Speaking at the inaugural function, EK Ponnuaswamy, President, Codissia, said the Coimbatore MSMEs were capable of supplying precision engineering products and urged the minister to permit the MSMEs here to form into a consortium to bid for defence procurement orders.

C Muthusami, President, Tamil Nadu Small and Tiny Industries Association, Chennai, wanted the creation of a ‘fool proof monitoring system’ to ensure that the procurement policies for PSUs were complied with and wanted the minister to address the issue of delayed payments that affected the MSMEs.

V Arumugam, Zonal GM, NSIC, Chennai, said during last year, NSIC had supplied 58,462.82 tonnes of raw material in Tamil Nadu alone valued ₹1030.50 crore.

Chandra Prakash Singh, former Chairman of the National Pharmaceutical Pricing Authority (NPPA), who as Coimbatore Collector had paved the way for the construction of Codissia’s Trade Fair Complex, said the building of the complex without much Government assistance was an example of ‘Coimbatore model of entrepreneurship’.

P N Balasubramanian, Chairman, Intec 2015 explained the significance of the presence of a large number of participants from different industries in the INTEC exhibition this year.

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