A Dream of 5 Trillion Dollar Economy, Role of MSME (Particularly Micro & Small Scale Enterprises)
The Micro, Small and Medium Enterprises (MSMEs) contribute about 7-8 per cent of India’s GDP, 45 per cent of the manufacturing output and 40 per cent of the exports. They are recognised as the engine of growth for the economy. After agriculture, MSME sector employs the largest number of persons. Thus role of MSEM is very significant in the economic development of India.
A dream of 5 Trillion Economy will be a reality only if MSMEs, particularly Micro & Small Scale Enterprises contribute in the manufacturing output. This sector has been adversely affected on account of both demonetisation and the implementation of GST. ALTHOUGH GOVERNMENT IS ANNOUCING FOR NOT CALLING MISSED PAYMENTS AS NPA, BUT BANKS REPORT MISSED PAYMENT AS SMA-1 OR SMA-2 IN CIBIL REPORT, A HURDLE IN GETTING ACCOUNT RESTRUCTURED OR CREDIT FACILITIES ENHANCED. In the present scenario Banks are hesitating to fund MSMEs citing one reason or another. To a genuine customer banks ask for collateral security more than 100% of the loan amount. A genuine person, willing to contribute towards MAKE IN INDIA & generating employment will either spend his whole life in creating security or allow his dreams to die an unnatural death.
Timely funds must be made available to MSMEs to meet their financial needs at reasonable rate of interest so that they can be competitive not only in the Domestic & international trade but will also generate employment at large in the remote areas.
NPA in the Micro & Small Scale Enterprises is mainly because of freebies viz. CTGMSE & MUDRA loans etc. which are advanced mostly to the non-deserving persons because of a corrupt nepotism in the system.
GOVERNMENT SCHEMES ARE MEANT TO PROVIDE INCETIVES TO DESERVING ENTERPRENEURS WILLING TO SET UP UNITS IN MICRO, SMALL & MEDIUM SEGMENT TO GENERATE EMPLOYMENT AND PROVIDE QUALITY PRODUCTS AT COMPETITIVE PRICING BUT BECAUSE OF GLITCHES IN SYSTEM BENEFITS OF SCHEMES DOES NOT REACH TO THE ULTIMATE DESRVING PERSON FOR WHOM THESE SCHEMES ARE DESIGNED.
BASIC PHENOMENA OF ECONOMICS “A POOR IS A POOR BECAUSE HE IS POOR” CAN BE CHANGED TO “AN ENTHUASTIC POOR CAN BE AN ENTERPRENEUR IF GOVERNMENT SCHEMES ARE ACTUALLY AT THE DOOR STEP OF DESERVING PERSON”.
THERE ARE VARIOUS GOVERNMENT SCHEMES TO PROVIDE HOUSING FACILITY TO EVERY POOR PUBLIC. BUT SUCH SCHEMES ARE NEED OF THE HOUR FOR EDUCATED, ENERGETIC & ENTHUASTIC ENTERPRENUERS. IF SUCH ENERGETIC PEOPLE ARE SUPPORTED BY GOVERNMENT & THEIR PROPOSALS ARE EVALUATED ON THE BASIS OF TECHNO ECONOMIC FEASIBILITY IN LIEU OF COLLATERAL SECURITY & BENEFIT OF INCENTIVE SCHEMES REACH TO THE ULTIMATE DESERVING ONE NPA PROBLEM IN MSME WILL BE RESOLVED TO THE EXTENT OF 90%-95%.
1. Loans up to Rs 2.00 Crore should not be linked with the quantum of collateral security mortgaged.
2. Whatsoever the collateral a Micro & Small Entrepreneurs own should be taken a security and rate of Interest should be linked with the security. Higher the security, lower the interest rate and vice versa.
3. Techno economic viability of the project must be given due consideration.
4. Timely action on application of MSMEs by the banks & FIs
5. Banks should be bound to follow the instructions of RBI & GOI in advancing loans to MSMEs. A proper valuation procedure of landed property where the Valour of landed property must disclose the proof of his basis for valuation. Rather it should be linked with the circle rate of property.
6. If MSME (Specially Micro & Small Enterprises) comes out of NPA it should be treated at par with new account. MANY MSMEs WHICH BECAME NON-PERFORMING ASSETS (NPA) DURING DEMONETISATION & INITIAL GST ERA & HAVE REGULARISED THEIR BANK ACCOUNT WITHOUT ANY OTS MUST BE GIVEN RELAXATION IN CIBIL & CMR RATINGS FOR THEIR PROJECTS.
7. Subsidies should also be given to the well performing MSMEs.
A TIMELY & REASONABLE INTEREST BEARING FLOW OF LIQUDITY WITH MICRO & SMALL SCALE INDUSTRY WILL NOT ONLY GENERATE EMPLOYMENT IN THE COUNTRY BUT ALSO GARNER INFLOW OF FOREX VIA EXPORT OF GOODS AND SERVICES.
THE ABOVE MENTIONED VIEWS ARE BAISC FACTS ABOUT TREATMENT METTED OUT TO MICRO & SMALL ENTERPRISES.