"MSMEs welcomed note ban"
Joe C Mathew March 4, 2017
MSMEs were the most affected by demonetisation. What measures did you initiate to solve their problems?
The ministry has not conducted any independent assessment. But during the demonetisation phase, we had meetings with various MSME associations. These associations welcomed demonetisation. They gave us suggestions that were taken up with the Ministry of Finance.
Digitising financial operations of MSMEs is a necessity for having a less cash economy. What is the role played by the ministry?
Most schemes of the ministry are now online. The Prime Minister Employment Generation Programme has been online from July 1, 2016. There is an online application system for disbursement of Market Development Assistance to khadi institutions and artisans. We also have an online application system for khadi certification. All schemes of the Development Commissioner (MSME) are online and accessible through the My MSME app. Schemes of the Coir Board are also accessible online.
The My MSME mobile application, for all MSMEs, provides all information about policies, registration, services and schemes of the ministry.
Over the last two years, the Central government has announced several programmes and schemes for the benefit of MSMEs. Are we beginning to see tangible outcomes?
A Scheme for Promoting Innovation and Rural Entrepreneurship (ASPIRE) was launched on March 18, 2015. It was formulated to set up a network of technology and incubation centres to accelerate entrepreneurship and promote start-ups in the agro industry. To alleviate the problems of non-availability of credit, the ministry is implementing the Credit Guarantee Fund Scheme for Micro and Small Enterprises in a big way. Coverage of loans under the scheme has been increased from `1 crore to `2 crore. The size of the fund has been enhanced from `2,500 crore to `7,500 crore to facilitate collateral-free loans to MSMEs. Loans extended by NBFCs for MSMEs have also been brought within the fold of this scheme.
What will be the impact of goods and services tax on SMEs? How prepared are they for the transition?
It is premature to talk about the impact as details of the GST law are still being finalised.
How will Budget 2017 impact India's MSMEs?
In the Budget, the government proposed to reduce the tax on MSMEs with turnover of less than `50 crore from 30 per cent to 25 per cent. This benefits 96 per cent companies in India that are filing tax returns. It will boost Make in India and growth of MSMEs.
Today's small units could become tomorrow's large corporations. Is there any specific sector where hand-holding can help?
There are many sectors such as leather, textiles, food processing and pharmaceuticals which are under different ministries. These ministries are making dedicated efforts to achieve tangible growth.
The previous government was criticised for jobless growth. Is the statistics different in the MSME sector? How many people were employed in the sector and what has been the growth over the last two years?
The last survey to measure the growth in the MSME sector and its effect on employment was conducted in 2006/07. As per 3rd and 4th All India Census of MSMEs (reference years 2001/02 and 2006/07), the number of MSMEs grew at 15.26 per cent and 15.02 per cent a year, respectively. The number of jobs generated were 24.93 million and 50.19 million in 3rd and 4th census, respectively.